Concentrated funds trump 'closet tracker' rivals

The industry's most concentrated funds have comfortably beaten their more conventional rivals over all time periods, new data has revealed.

Research produced by Investment Week using Lipper data analysed the performance of funds in the IMA UK All Companies sector according to the number of holdings. It found that ‘ultra-concentrated’ funds (those with 30 holdings or less) have outperformed peers with 150 or more stocks over one, three, five, and ten years. These time periods include both rising and falling ­markets. The concentrated funds returned an average of 42% in the three years to 30 April, compared with 28% for funds with 150 holdings or more. The research broke down the 176 funds in the sector disclosing their ...