What caught my eye this week.
The IT Investor has a honeypot of a post up this week for active investing junkies. He’s dived into his investment trust data to sieve out what he’s calling ‘double doublers’ – investment trusts that doubled their share price in the first half of the last decade, then did it again in the second.
It sounds spectacular – it is – but qualification requires ‘only’ about a 15% return a year. You could have got a slightly better return from a US S&P 500 index fund, and many passive investors did.
The best double doublers did even better though, and the result is catnip for an active investing sinner like me. (Reminder: it’s my co-blogger The Accumulator who is Mr Passive).
Here are IT Investor’s top five double doublers:
What’s particularly galling is I owned four of these five trusts at some point in the last decade – but I hung on to none of them for anything like ten years.1
The curses of active investors are indeed many and various. They’re not just down to the fact it’s a zero sum game, which guarantees net disappointment for average pot of money, after costs and fees. There’s also the way that even when you get it right, sooner or later it turns into wrong.
Well maybe you sell too soon. Or maybe you realize you should have bought more. Or dozens of variations on the theme. Stock picking is not a hobby for anyone who occasionally brings a box of old love letters down from the attic to tearfully wonder what might have been.
But it’s not a game for those who wouldn’t even keep the letters of their old flames, either. If you’re that rational, buy the market!
I did it my way
Despite all this, until we grow bored or are physically restrained, some unfortunates like me will always be there to continue the quixotic quest of trying to beat the market. If you want more ways to understand why, Robin Powell tackles the subject in a guest post on Humble Dollar this week.
Robin cites Meir Statman, a finance professor at Santa Clara University, who gives several good (/bad) reasons including this particular bugbear of mine:
Many investors, Statman says, frame their returns relative to zero, rather than relative to the market return — the performance they could have earned by investing in a low-cost index fund.
“A 15% annual return is excellent,” he says, “but it is inferior when an index fund delivers 20%.”
It’s been at least a decade since I’ve taken seriously any active investor who doesn’t benchmark properly. Yet go to a meet-up and you’ll find they abound.
Perhaps that’s because as the wonderfully-named Professor Statman says, many of us:
…need to feel that we’re better than average.
And nobody active investing to that end wants a number telling them otherwise!
Have a great weekend.
How pensions will help you reach financial independence quicker than ISAs alone – Monevator
Also tons of interesting quirks, counters, and variations discussed in the comments – Monevator
From the archive-ator: Keep it simple, stupid – Monevator
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HMRC says three million people still have not filed annual tax return – Guardian
Lloyds, Halifax and Bank of Scotland to charge up to 49.9% interest on overdrafts from April – MoneySavingExpert
Property sellers face reduced tax deadline [Search result] – FT
The Wolf of Wall Street’s Jordan Belfort sues film’s producers for $300m – Guardian
Pensions boost for Britons living in the EU [Search result] – FT
China’s falling birth rate threatens economic growth [I think lower birth rates everywhere are positive, personally] [Search result] – FT
Products and services
Visualizing the expanse of the ETF universe [Infographic] – Visual Capitalist
Get £20 for free from RateSetter when you invest just £10 [Affiliate link] – RateSetter
How to buy the freehold if you’ve bought a leasehold property – ThisIsMoney
How fees eat into passive fund investments [Search result, rather quixotic £500 experiment] – FT
Cosy cottages for sale [Gallery] – Guardian
Comment and opinion
Wealth is what you don’t spend – Morgan Housel
The day the market crashes [Podcast/video] – Motley Fool US
“I earned £72,000 as a circus performer last year” – Guardian
This climb is different? Putting fears about tech firm scale into perspective – Of Dollars and Data
How older entrepreneurs are boosting their pension income – ThisIsMoney
Preparing for lower returns from US stocks [Look out! Plot twist] – The Irrelevant Investor
Rich and run out of room in your tax shelters? Consider a family investment company – Finimus
Here’s why you should rebalance – Morningstar
Naughty corner: Active antics
Four-letter words of investing – Anand Sridharan via LinkedIn
Ted Baker’s collapse is a lesson in the dangers of too much growth – UK Value Investor
US active funds had a so-so 2019 [Not news if you know active investing is overwhelmingly a zero sum game] – Morningstar
France is making start-up friendly reforms to lure tech talent – CNBC
Kindle book bargains
The Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth by Tom Burgis – £0.99 on Kindle
The Making of a Manager: What to Do When Everyone Looks to You by Julie Zhuo – £0.99 on Kindle
Economics: The User’s Guide by Ha-Joon Chang – £1.99 on Kindle
Off our beat
Doomsday Clock moved to 100 seconds to midnight; closest to catastrophe ever – Sky News
Punctuality is the single best indicator of success – Inc
Productivity advice for the weird – Ramit Sethi
Why you’re doomed to techno-befuddlement by the time you’re 70 – Bennallack
When in doubt, make soup – Raptitude
Do you love doing the same thing over and over? Here’s why it doesn’t make you boring – Guardian
Waterworlds: The magic of New South Wales’ ocean pools [Interactive/Multimedia] – Guardian
“When economists want to understand the most significant economic events in history, they rarely focus on the important narratives that accompanied those events.”
– Robert Shiller, Narrative Economics
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The of dollars and data “this climb is different” article is, by the time you finish it, the strongest reason I have read for a long time to go further down the passive rabbit hole I seem to be persuading myself into as the years go by. Every year the percentage of my portfolio that is actively invested shrinks.
Due to a couple of stinkers this year I have done as expected on the passive side but poorly actively. other years, other outcomes. I do not believe I can beat the market. This begs the question “why do I actively invest at all?” The only rational answer I have is that it keeps me interested and forces me to learn. Not all returns are paid in cash.
World trackers for me this year I think.
Active investing is such fun-buy and hold is so boring
The investing process is counterintuitive-humans find doing nothing tough
Investors should perhaps get their kicks from the day job -make their money there and leave investments once purchased alone especially if it’s a World Index Tracker!
Somewhat irrelevant to China but if I recall correctly from the book Factfulness (excellent book btw), higher birth rates simply exist because in underdeveloped countries half the kids will die by age 4-5. Sad but it’s a survival thing.
Once the economies and the health practices improve, those birth rates converge towards the western ones.
“A 15% annual return is excellent,” he says, “but it is inferior when an index fund delivers 20%.”
What if the index delivers 20% return with 20% volatility and the fund delivers 15% with 10% volatility? So I lever the fund 2x. I’d then have 29% return (funding say 1%) with 20% vol. The fund is a clear winner. Personally, I benchmark all my funds against the most relevant index but it’s not good enough to just look at the excess return. You need the tracking error, information ratio, correlation etc vs. the index to get the full picture.
Where I’m “not a serious investor” (thanks TI!) is that I don’t see a need to benchmark my whole portfolio against any index. I own the portfolio to outperform liabilities, not beat some arbitary index. I’m an absolute (real) return investor. If I have any index, it’s inflation+4%, net of taxes (say 10% gross). I don’t see that approach is uncommon at all, including “serious investors”. Of course, I’m not blind to the performance of asset classes. I need my wealth to rise in comparison with other people, otherwise I risk becoming poor in relative terms. It’s just not the whole aim.
My active investments have never done to produce higher returns but to deliver lower volatility. I want a better Sharpe ratio (better Sortino really) and, most important, a floor on losses. If I benchmark myself to the typical asset class indices, I also get their volatility profile. Now, in the last decade, the Sharpes of many asset classes have been around 1, due to represssion of volatility by central banks. Long-term, though the Sharpes are closer to 0.3-0.7. So a 10% return target would imply a 20% vol; so a 30%+ drawdown at least once every two decades is likely. That might be fine for some but I couldn’t stomach it. I want 10% returns with 5% volatility and that requires active investment.
ZX48, you’ve lost me there. Probably my fault, I do go for the simple approach.
Why would being an active investor reduce volatility? I thought the main ways to do that were allocating assets between non-correlated classes, and being well diversified within each class. If you do that, it seems to my naive self that whether the underlying investments are index trackers, active funds, or a portfolio of personal picks, makes no difference in principle.
But probably I’ve missed something, maybe because of the leverage you use.
Thanks to the Investor for featuring my piece this week but apologies for reminding you of those trusts that got away!
Although I’m an active investor myself, I also reckon the passive route is much more appropriate for the vast majority of people (99% maybe?).
The money I’ve invested for my wife and children is all in trackers but I’m happy to stick with active myself because I think I have a reasonable handle on the risks I’m taking by doing so and I enjoy the process.
But I do benchmark (properly now, not so well in the past) and if I do find that I’m underperforming by too much then I may well switch to passive, or make active a small part of my overall investments.
@ZXSpectrum, I too am interested in your approach. Risk parity? Derivatives?
productivity advice for the weird. It’s almost as if i’ve written the blog myself (minus the success part)! Interesting read. Also punctuality. I’m always on time of early, can’t stand late people. I’m going to do an experiment with a family member who is always late and see how long they think a minute is! Thanks for the links
“What if the index delivers 20% return with 20% volatility and the fund delivers 15% with 10% volatility? So I lever the fund 2x. I’d then have 29% return (funding say 1%) with 20% vol.”
What a great scheme! What could go wrong there? How about a 50% drop in the fund?
Seriously though, history is littered with fancy ideas such as this, LTCM being an absolute classic example of where leverage and hubris can get you. This stuff is often based on the theory that market returns follow a lognormal distribution. Lognormal is a very good approximation. The thing is though, that is all it is. There is no physical law that says a market must behave in a certain way and every so often markets do not behave in the way that Nobel laureates say they should according to the ideas they have borrowed from 19th century physics.
If someone wants to see a recent example of where smartass thinking can go wrong, take a look at what happened to inverse VIX ETFs a few years ago. From memory, I think the theory with these was that they produced a return based on contango in the VIX futures market (Don’t quote me on that, I might be wrong about precisely where returns were supposed to come from). Years of stunning returns AND stunning risk adjusted returns according to Sharpe, Sortino, whatever. Probably even more stunning returns in backtest as well. They failed in a single day.
If anyone offers an investment with a “proven” track record that will produce high risk adjusted returns using large amounts of leverage, my advice is to say “Best of luck” and put your money in a world tracker.
I don’t care for someone promising me an absolute return either. Risk can be moved around, massaged and even manipulated into highly asymmetric forms where say you might win 99% of the time, but run the risk of losing everything 1% of the time.
IMHO you cannot buck the market as a very smart lady once said. If you think you have found something that will deliver a guaranteed risk free return above the risk free rate, chances are you have not spotted where the risk is.
Double doublers eh? Great. Do you have a similar posting from 10 years ago? If so, how have the funds done over the last 10 years? I would not mind betting that a man called Woodford might appear in the article 🙂
Apologies for my cynicism and I really don’t have any ill will towards ZXSpectrum48k and I hope this does not come across as a personal attack. He writes good, well informed comments, but I thought I might put across another point of view before your readers get too carried away.
Firstly, a quick thanks for all the articles and links over the years.
Benchmarking can be tricky.
Which index should you benchmark against? You have any number of passive equity ETFs/index funds to choose from.
Say you choose the all-encompassing (you think) market-cap global equity index. Do you then benchmark that against all the other passive equity indices you might have considered? Did you choose global developed only or developed+emerging? Maybe some smart beta passive index did better over the past year.
What timeframe do you measure yourself against? Short term performance is notoriously volatile. A medium / longer timeframe is better (I’d say 5 years+).
What level of risk are you taking in your personal account? What does that risk look like relative to your index? Is volatility even a valid measure of risk anyway?
You might not care about benchmarking your personal account because relative performance doesn’t pay the bills – it what’s you own that matters to your performance, not what you don’t own.
But I absolutely agree that active investors should check their PA account performance against other measures.
And those measures should ideally be on a risk-adjusted basis and over a decent timeframe.
Just don’t get too hung up about it.
Disappointed with the FT article.
“How fees eat into passive fund investments”
I would have expected better from the FT.
Well i added a new word “quixotic” to my vocabulary
No surprise to see a couple of Smaller Companies funds in there. UK Smaller Companies funds haven’t fared well of late largely due to Brexit uncertainty but I expect they’ll probably get back to outperforming the FTSE 100 before long.
I was looking around for passive doublers 3 or 4 years ago and ended up splitting my ISA allowance between a Global Health and Pharma Index Tracker and a Global Tech Index Tracker. The former has performed relatively poorly and its 5-year return is sitting at 70 while the latter has powered on and is around the 170 mark.
Another non-serious investor here! But in my defense most of my portfolio is passive and I can’t be bothered to check the relatively small active bit.
On leveraging to invest, there is another great article on the Finimus site on leveraged ETFs that illustrates the points raised by @Naeclue well with worked examples.
@Naeclue. I don’t really understand your points. Lognormality and LTCM? My point about levering the fund 2x wasn’t related to leverage. I was pointing out that you can’t characterize a fund simply with one dimensional metric called “return”. The volatility or correlation may be different. Nothing more insightful than that.
I was also arguing against thinking purely in terms of performance as your only aim. For me, my portfolio is only there to hedge liabilities, not to maximize returns. Yes, for something like an inheritance for my children, a long-term aim, such a liability is possibly best met by a simple set of trackers, probably with a strong equity bias.
That simply doesn’t always work. I have large, rising liabilities due in the next 20 years. In the good old days, a govt bond ladder would have done the job. Except govt bond ladders offer negative real yields while my liabilities have an above CPI deflator. I could buy equity trackers but that exposes me to terrible sequencing risk if equities fall or stagnate (or both). Now blogs say “hold bond funds” or “hold cash”, but, sorry, I’ve run through the simulations and it doesn’t work. Cash is also on a negative real yield and holding two decades worth of it is punitive. I like some forms of bonds but not as a hedge for equities. The equity-bond correlation has been rising for a decade. US Treasuries and the S&P were positively correlated in ’18 and ’19.
So I disagree that equity/bond trackers and cash are a good enough for all purposes. I need modest positive growth for my assets but I can’t take a major hit. What I don’t need is large positive growth on these assets. So all I’m doing it selling some of the probability distribution for high asset growth to buy some of the probability distribution for stagnant/negative asset growth. I can manifest that in many ways but they all have constrained downside. I’m actually reducing risk to smooth out my return profile.
Does that mean parts of my portfolio earn less than they could have? Of course. I’m buying certainty and that costs. And that’s the point: I’m not a risk-neutral investor. By comparison, I’m constantly surprised how much risk appetite you guys all have. It’s so much greater than mine. The willingness to buy 100% equity portfolios, to take 30% drawdowns, rely on unstable correlations. It’s very heroic of you all but I’m a too much of a coward.
As for your cynicism, I have that aplenty. I’d like to call it rational scepticism but the cynic in me thinks I’m lying to myself. You’re sceptical that I can generate alpha. I’m sceptical that you guys are as risk-neutral as you assume you are.
@ZXSpectrum48k — I don’t believe we really disagree. Clearly you are benchmarking your portfolio, adjusting to your own needs. 🙂
It’s not really possible to add several paragraphs of caveat and explanation to every point we make…
The average active DIY stock picker in my experience doesn’t even track their returns properly and the closest they come to a benchmark is “does my broker show my numbers in green or red?” That’s who my comment is aimed at.
Of course as you say risk/vol is important for most, which is why we still think most investors should hold bonds.
Your points are interesting and educational as ever, but in a world where – literally – my own sister who is senior in a FTSE 350 company calls me every March in a panic because she can’t remember how ISAs work, your approach is from Mars for even the average reader of this site. 🙂
Again please don’t mistake this for some kind of censure — please do keep your comments coming, as there are some of us here who will learn from them.
But hopefully some context.
It’s strange to see smart people touting the uncritical following of the crowd as the indisputably rational thing to do.
Sure, I’ll grant, the pitfalls of active investing are many and perilous. But we know rather well what they are and we have ways to deal with them. Some basic rules for example: don’t pick individual stocks, get a professional to manage your money. Don’t be too active – pick managers and let them work. Don’t overpay for performance, etc. There’s a good body of finance research and it tells us a lot about picking good managers. So we can start by reading that and paying attention.
In a broader perspective, active management is actually not a zero-sum game because it provides an indispensable capital allocation function to society. While passive investors can relish their superior track record (on average and net of fees), they can only do so by free-riding on the capital-allocation work paid for by active managers and their clients. Well, saving money by free-riding can work for you sometimes, but I don’t think it’s necessarily such a bright thing to do, nor is it anything to be proud of. And you, TI, are not a sinner for funding the essential work of capital allocation.
Passive has worked so far, I guess. But passive is changing the rules of the game and may be sawing the seeds of its own destruction. While the intelligence and composure of active investors have often failed to shine throughout history, it would be exciting indeed to see the excesses of mal-investment that can be achieved in a market that is dominated by systematically-uncritical, indeed dogmatically herd-like passive investors and the infinitely-deep-pocketed and cost-indifferent central banks.
So sure, passive has “worked”, though it is mistaken to conclude that from choosing the S&P 500 in hindsight to represent the “passive” vehicle and comparing it to investment trusts that mostly operate in another geography, all while ignoring the increase in pricing (not value) that drove the S&P 500 up. But even had that been a valid comparison, it is a short-sighted view. It is blind to the widening gap between price and value, and to the systemic need for competition and evolution. That’s a lot to give up, just to avoid a manager’s fee.
I think you are a bit tough on the average amateur investor whose sole aim is to achieve a satisfactory retirement
The private investor has been poorly served in this regard by the financial industry to whom the least objectionable description that could be applied is that there seem to be a lot of “ rascals”about!
Aged 73-retd 17 years so seen Equitable Life and other nameless Life Companies,Unit Trust schemes that seemed to need all higher rate tax relief as expenses to make them run plus some choice IT,s that blew up spectacularly -never mind Woodford
For the average amateur investor to discover Vanguard and John Bogle plus index fund investing was a literal life saver for many in the US and now in U.K. and across the world
A good product that does the business is surely what we all want
If other forms of investment do not deliver the job -they deserve to fade away
It’s ordinary people’s life expectations we are dealing with here
There will alway be the bright guys with plenty of cash and access to superior research that will beat the market and continue to make the market
The sensible thing for the rest of us is index and be able to sleep at night and have a good retirement
Have to confess I don’t track my returns at all other than by a glance at the account totals and wondering where I left the results last time I wrote them down. If the asset allocation is about right, what would I do with the information ?
One of the links spoke of ‘ micro-dosing on lsd’. I am begining to think I am out of touch with the world in more ways than this.
@Michael L. “There’s a good body of finance research and it tells us a lot about picking good managers.”
I have not seen any credible evidence that shows it is possible to pick a fund manager that is likely to beat the market. Quite the opposite in fact. Some fund managers will beat the market, but you don’t know which ones will in advance.
Take a punt if you want, but do so in the knowledge that it is no 50/50 coin flip. You are more likely to lose than win due to the higher costs of active fund management.
@ZXSpectrum48k, I thought you were advocating the use of leverage. Apologies if not. You gave the impression that a portfolio consisting of a 2 times leveraged fund with volatility of 10% will behave like a fund with volatility 20%. I am sure you know full well that it will not.
I run a 60/40 portfolio. Did in accumulation, continue to in decumulation. I don’t do benchmarking. Instead, at the start of each year, I ask myself how much can we spend this year, assuming a 3% withdrawal rate (it used to be 4%).
Over some periods equity/bond correlation has been positive and sometimes negative. Nobody knows how it will go in the future, but correlation will never be highly positive and if it did I would cut the duration of my bond/cash portfolio (I currently target duration < 8 years).
I would love to be able to get inflation + a few percent, with very low volatility. Long ago I judged the best that could be done towards that goal was to run a equity/bond fund due to the low costs and low taxation (and low effort) via pensions, ISAs and CGT allowances.
I could get a risk free return by buying an annuity or a ladder of index linked gilts, but I am prepared to take the risk of getting better returns, in full knowledge that there is a risk of getting worse returns.
@TI, I am unsure what an investor would gain from benchmarking. If they beat the benchmark over some period, should they conclude that they have been smart or just lucky? Similarly, if they underperform, do they conclude that they are rubbish at stock/fund picking or just unlucky?
How are they to tell the difference between being smart and lucky?
I too would like a low inflation beating return with a low volatility. Perhaps this will be covered by @TA in the current series on pensions as it forms one of the strategies in the Michael H McClung book Living Off Your Money (https://monevator.com/review-living-off-your-money-by-michael-mcclung/). Based on this I changed my portfolio towards the Triad version that includes international REITS, small, value, emerging markets and of course bonds. Subsequently, following a comment by @ZX I tweaked the bond allocation to include emerging markets. The book tries to find the sweet spot of a high harvesting rate, low volatility, high market diversification and high comfort level. It’s all based on backtesting scenarios, so it might not cover some future black swan!
@Passive Pete, I like the McClung book as well, but have decided to stick with a fixed 60/40 portfolio rather than following his back tested methods. We do vary the safe withdrawal amount each year though, currently I use 3% of portfolio value at the start of the year, excluding property, etc. Maybe I will let that increase in later life.
We don’t stick rigidly to 3%, just use it as a budgeting guide. The way I think about it is that for every £1 overspend, that means 3p less in future years and for every £1 underspend we get 3p more.
If we spend £40k this year on a new roof, that means £1200 per year off future annual spending. Can we afford it and do we think it worth doing? Yes, so go ahead (maybe).
I don’t know, @Naeclue. Are you aware that there are quite a few published papers that show all sorts of relationships between externally-visible attributes of mutual funds and their subsequent performance?
Past experience strongly suggests that managers do better when:
– they don’t pay fees to distributors
– they have a high “active share” and a concentrated portfolio (in other words they are independent thinkers and invest only in their higher-conviction ideas)
– they manage smaller sums of money
– they don’t manage multiple funds (in particular when they don’t manage multiple funds with divergent objectives)
– they manage investments in their locality
– their fees depend directly on performance
– they invest their own money in the fund
– they have an institutional share class
These relationships probably aren’t just statistical accidents – these are exactly the predictable results if one does not assume that markets are perfectly efficient.
There are other known relationships between manager attributes and performance. I can give you links if you want to scrutinize these papers. Some of the effects are rather large – larger than the difference in fees between index funds and some actively-managed funds. Past performance is also informative, though it should not be used as a sole predictor of future returns because it is too noisy.
So I believe there’s enough evidence to suggest that it is at least possible to choose market-beating managers (net of fees), if one puts enough work into it. While I might not possess the knowledge and skill to achieve that, I wonder how you might know my odds, given that you know neither my background nor the amount of work I put into it.
I’ll tell you what we probably agree on: one probably can’t beat the index funds by going to the nearest financial adviser and investing in the funds that adviser recommends. That would be too easy, though it is still a pretty good policy for many investors who’d rather not make a greater effort.
Partially linked – and maybe not the best place to ask, but having decided to ‘gamble’ and sign up for freetrade this seems the best post to ask questions about CGT and assessments.
Am I right in understanding that if I’m a basic rate earner through PAYE, would need a massive increase in value to even move to the next band and have gains of less than £12,000 there’s no need to file a return save for the below?
The one bit that I’m unsure of, say with the threshold that if the return is x4 purchase price then a return does need to be filed, presumably selling the ‘free’ share would push it into this realm and so I would then need to file a return, even though there was actually no gain in excess of the allowance?
Thank you in advance!
@Michael, There is a difference between “do better” and “more likely to give better risk adjusted returns than the market after fees”. I have seen a lot of evidence linking low costs to improved returns, but as for running a concentrated portfolio, that means taking on more diversifiable risk. Nevertheless, I and I am sure many others would be interested in seeing the papers you mention, so yes, please provide links.
What funds have you identified that you consider will beat market?
My way of diversifying is choosing multiple managers, not a single over-diversified fund. Even the most concentrated funds still have 10-20 positions, and an investor can choose multiple managers that each run a concentrated portfolio – thereby obtaining a diversified portfolio made of 5-10 concentrated portfolios. I don’t think I need the greater diversification offered by the big index funds.
Some studies about attributes of successful funds and mangers are:
* mutual fund performance and the incentive to generate alpha / Del Guercio and Reuter
* Mutual Fund’s R^2 as Predictor of Performance, Yakov Amihud and Ruslan Goyenko
This article shows that past correlation to a benchmark is a negative predictor of future performance.
* Managerial Multitasking in the Mutual Fund Industry, Agarwal & Ma
* Does Fund Size Erode Mutual Fund Performance? The Role of Liquidity and Organization / Chen, Hong, Huang & Kubik
* Does herding behavior reveal skill? An analysis of mutual fund performance / Jiang & Verdado
* Fund Managers Who Take Big Bets: Skilled or Overconfident / Baks, Busse, Green
There are many more articles I can cite that find such relationships (though I haven’t read them all). If there’s any fund charactersitic you’re particularly interested at, ask.
Some UK funds I expect to outperform over the long term are: RIII, TB Amati Smaller Cos, ARR, UEM and SWMC Small Cap European Fund (though note that this is not a long-only fund and should be judged appropriately).