They did not feel the extra performance was worth the risks and pulled their

They did not feel the extra performance was worth the risks and pulled their clients out before the scandal over Mr Young’s conduct became public.Instead of being fixated on who is top of the various league tables, as most published fund management surveys do, Premier concentrates its analysis on determining how that performance was obtained. Reuters Citywire, the City and fund management website, has made a name for itself with a fund performance analysis method that concentrates on following the manager rather than individual funds.David Turner, Citywire’s managing director, said: “Some managers are better than others Our analysis of unit trust results backs this. Of the top quartile (25 per cent) of fund managers from our 2000 survey of unit trusts, 47 per cent remained in the top quartile in the 2001 survey. Now, random chance would mean this figure would be 25 per cent. Also, none of the top quartile in 2000 were in the bottom quartile in 2001. We do not say it is the only way of judging fund performance, but it is one of the most important filters. We start with the fund manager, while most people start with the fund.

But investors also need to take into account the market conditions, investment style and the investment process at their fund management company.”But Brian Dennehy, of the IFA Dennehy Weller, does not agree with Citywire. He said: “Over many years I cannot recall any fund which we previously recommended becoming ‘bad’ because a fund manager left. On the contrary, two key funds we recommended changed managers and got even better. These were Jupiter Income and Newton Higher Income.”In autumn 1999, William Littlewood (a brilliant young fund manager) stopped managing Jupiter Income. By New Year 2000, many advisers were saying investors should get out, and Gartmore UK Growth and Income was widely mooted as an alternative.In the two years to April 2002, the Jupiter Income fund was up 21.9 per cent, and the Gartmore fund down 8.6 per cent, and the relevant index (FT All-Share) was down 11.7 per cent (source Lipper, prices bid-to-bid).Toby Thompson left Newton Higher Income in July 2001 and went to New Star. He was replaced by Clive Beagles, who had been his deputy for five years.

Since January 2002, New Star Higher Income – Thompson’s new fund – is up 1.29 per cent, and Jupiter Income is up 4.37 per cent (to June 2002, source Lipper bid-to-bid). The naming of a single fund manager for a fund clearly has the effect of raising the prominence of that person according to performance. But the person involved is often not an idiosyncratic loner but part of a team.Take the departure of Stephen Whittaker from Invesco Perpetual where he managed the group’s UK Growth fund. After Mr Whittaker’s departure for (you guessed it) New Star on 10 May, there were no writs or blind panic from Invesco.Mike Webb, Invesco’s chief executive, said: “I am disappointed with Stephen’s decision to leave, which was not anticipated. But with more than 20 years of experience in UK equities I have great confidence in Ed Burke’s ability to assume management of the Invesco Perpetual UK Growth Fund. Together with Neil Woodford, Mark Barnett, Graham Kitchen and others, we have an exceptionally strong UK equity team.”So investors may find more reassurance in a good team rather than in hitching their investment wagon to a wandering star.

In any case, just how many stars are out there? You would think that to be a star you had to be consistently above-average when measured against the other fund managers in your sector.But I have made a study of 1,467 funds showing that over five years only 38 funds – less than 3 per cent – with the same fund manager in place for five years were ranked in the first or second quartile in their sector in each of the five years. Getting stars in your eyes is not a guaranteed route to riches…. but some shine so bright it’s hard not tooIn an era when it seems madness for a fund manager not to have a method, Roger Guy is content to live on his wits. “There’s a lot of judgement and analysis and, I suppose, experience,” 37-year-old Mr Guy says. He has an individualistic style running Gartmore’s £5bn of European funds, but he rarely goes to the Continent.