Top 20 non-US portfolio managers favor stocks, emerging markets

This latest set of portfolio managers ranked by Citywire are the top 20 outside the U.S. market, all individuals whose mutual funds are not currently accessible to American investors. They have been ranked based on their risk-adjusted returns over the past three years.

As one might expect, with 41 countries and 10,000 portfolio managers tracked by Citywire outside the United States, the ranking is an eclectic mix of players.

Top 20 portfolio managers outside the U.S.*

Manager Name
Contributing Fund(s)
1 Akhilesh Baveja Charlemagne Capital London Charlemagne Magna MENA
2 Vinay Agarwal First State Singapore First State Indian Subcontinent II; First State Regional India
3 Jonathan Pines Hermes Investment Management London Hermes Asia ex Japan Equity
4 Richard Hughes M&G London M&G Extra Income Sterling
5 Sebastian Muller First Private Frankfurt, Germany First Private Euro Dividenden STAUFER
6 Jinesh Gopani AXIS Capital Corp. Mumbai, India Axis Long Term Equity Fund-Growth
7 Tom Naughton Prusik Investment Management London Prusik Asian Equity Income 1
8 Luigi Degrada Fideuram Milan, Italy Fideuram Fund Equity Italy; Fideuram Italia; Fonditalia Equity Italy; Interfund Equity Italy; Ailis Equity Italy Fund
9 Domenic Gallelli Guardian Capital Toronto, Canada Guardian Balanced Series
10 Ben Russon Franklin Templeton Investments (Franklin) Leeds, U.K. Franklin UK Rising Dividends; Franklin UK Opportunities; Franklin UK Managers Focus
11 David Robinson Dalton Strategic Partnership London Melchior Selected Trust European Opps
12 Torben Ronberg ECM Asset Management London ECM Senior Secured CC
13 James Dougherty Macquarie Sydney, Australia Macquarie Small Companies
14 Elizabeth Soon PineBridge Hong Kong Pinebridge Asia ex Japan Small Cap Equity; Pinebridge India Equity
15 Graham Kitchen Henderson Global Investors London Henderson Mainstream UK Equity; Henderson Institutional High Alpha UK Equity
16 Richard D'souza SBI Asset Management Mumbai, India SBI PSU Fund-Growth; SBI Magnum Multicap Fund-Growth; SBI Magnum COMMA Fund-Growth
17 Audrey Bacrot Evalfi Paris Independance et Expansion Sicav Small Cap
= William Higgons Evalfi Paris Independance et Expansion Sicav Small Cap
19 Mark Westwood Columbia Threadneedle Investments London Threadneedle Investment II UK Growth; Threadneedle UK Select
20 Oliver Kelton Odey London Odey European Focus
Source:* Note: All managers rated "AAA" by Citywire

However, the most striking feature of the list is how little diversity there is in terms of asset classes, dominated as it is by equity portfolio managers, with only one bond manager making the cut.

This reflects the challenges that managers have had in calling when and how rate rises will come to pass, with many going too defensive too soon.

There is a real emerging markets flavor to those managers who have added the most value over three years, with those who focused on India and the broad Asia Pacific region featuring prominently. In fact, Indian equities is the best-represented sector, with four managers on the list.

There can be only one name at the summit, however, and topping the list is an emerging markets player in the shape of London-based Charlemagne Capital's Akhilesh Baveja.

He runs a portfolio specifically focused on the Middle East and North Africa region. Nearly a third of the portfolio is invested in the United Arab Emirates. The last three years have been good for the fund, which is up 59 percent.

Even with the region's dependence on the battered oil market, Baveja has managed to limit losses to just 5 percent over the past 12 months, nearly a quarter of the 18 percent decline in the S&P Pan Arab Composite index.

The U.K. equities sector is also well represented, with three managers. Despite the underlying efficiency of the U.K. stock market, it is one of the major sources of consistent outperformance in the world. Some 74 percent of fund managers in this sector outperformed over the past seven years. While you cannot rule out the impact of survivorship bias — bad managers will move or be fired — it is a figure that U.S. equity managers must look on with envy.

Elsewhere, European equities have been catching the eye of investors recently as the U.S. equity rally shows signs of faltering.

Three of the 1,000-plus managers tracked by Citywire in this sector have done enough to mix with the best by operating different approaches to investment in European equities.

Sebastian Müller of Germany's First Private offers a European equity income fund focusing on the continent's top dividend payers. This offering has no exposure to the U.K., preferring the economies of Germany, France, Spain and Finland.

Then there is portfolio manager David Robinson of Dalton Strategic Partnership, who has a huge 13 percent invested in Ireland. Indeed, his top holdings are low-cost airline Ryanair and shipping company Irish Continental Group. He is also keeping around 10 percent of the fund in cash for the right buying opportunity, which might not be to all investors' tastes.

Rounding out the trio is Odey Asset Management's Oliver Kelton, who is betting big on European telecoms with 8 percent in France's cell phone service provider Orange.

Despite the variety in styles, all three have generated similar returns for investors of just south of 40 percent over the past three years.

— By Frank Talbot, head of U.S. investment research at Citywire