Star names fail to shine

THE ERA of the star fund manager is well and truly over, as investors increasingly take a passive approach to building wealth inside their pensions and Stocks and Shares ISAs.

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KEEPING TRACK Passive charges tend to be lower

For years, private investors relied on big name managers like Neil Woodford, Terry Smith and Nick Train to deliver market-beating returns year after year. They became legends for their stock-picking skills, but confidence in star managers was shattered after Woodford's Equity Income fund collapsed in 2019, costing savers small fortunes.

Smith and Train have avoided scandal, but their stars have faded as they struggle to match their earlier stellar performance. Smith's Fundsmith Equity has trailed its benchmark in each of the last five years, rising 29% over that period against 48% across global stock markets. Train's Finsbury Growth & Income Trust has grown a mere 3% over five years, a period when its UK equity income benchmark climbed 54%.