Four managers have 'beaten Buffett' over the past two decades

James Baxter-Derrington
clock • 2 min read
Four managers have 'beaten Buffett' over the past two decades

Over the past two decades, four UK management teams have beaten Warren Buffet on a 20-year total return basis, according to new analysis from AJ Bell.

James Anderson, Alexander Darwall, Max Ward and Nick Train and Michael Lindsell, if counted as a management duo, have all posted higher returns over the past 20 years than the Oracle of Omaha, while investing in comparable markets and remaining at the helm of their respective offerings for the entire period.

Scottish Mortgage's James Anderson, who announced his retirement earlier this year, has topped the table, returning 1,928.1% over 20 years, while Lindsell Train is the only other directly comparable fund and management team by AJ Bell's metrics to have returned over 1,000% across the period, providing its investors with 1,620.7%.

Anderson, Lindsell Train, Ward and Darwall definitely sit in the skilful category, having bettered the world's best investor over the last two decades."

Alexander Darwall's Devon Equity Management European Opportunities fund has returned 787.3% since 20 April 2001 and Max Ward's Independent Investment Trust offered 641.8% to investors, while Berkshire Hathaway has produced a total return of 507.5% over the same period.

These managers have been narrowed down as the only ones who have "beaten Buffett" due to investing in developed market large-cap equity and maintaining the same managers for the entire duration.

Laith Khalaf, financial analyst at AJ Bell, clarified that these managers do not hold the same US focus as Buffett, but argued his "makes their outperformance more impressive, as the S&P 500 has been the best performing major index of the last two decades".

Berkshire Hathaway has been bested by 24 funds investing in developed market large-cap equity, but by a total of 160 funds available to UK investors, when all sectors are considered.

Scottish Mortgage is nudged into second place when these restrictions are dropped, with Aberdeen Standard Asia Focus offering investors 1,975.7% from 20 April 2001 to 20 April 2021.

Of the total 160 funds to outperform Berkshire Hathaway over the period, 61 funds invest in emerging markets, 57 invest in small- and mid-caps and 18 funds hold specialist mandates.

Khalaf said these areas hold elevated risks and, as such, should offer higher returns to compensate but investors should "nonetheless sit up and take notice that these markets have delivered such rich long-term returns and have performed better than the world's best investor".

He added: "Investors picking active managers have no guarantee of future success, but the longer a manager's track record of outperformance, the greater the chance it has been achieved by skill, rather than luck.

"Anderson, Lindsell Train, Ward and Darwall definitely sit in the skilful category, having bettered the world's best investor over the last two decades. None can claim to be better than Buffett just yet, who's still investing at 90, but a dazzling 20-year track record is, at least, a good start."

First published by our sister title Investment Week