Candidate funds are ranked by their outperformance of a relevant benchmark in the year to May 31 2018. Then potential 100 Club members are screened to ensure they delivered strong five-year returns.
A fund must have put a double-digit gap – 10 percentage points or more – between its own performance and that of its index in the past five years for it to convince us that it has long-term staying power.
We expect it to deliver at least half that level of outperformance over one year – 5 percentage points or more for equity funds – to ensure it has delivered the kind of elite returns that would place it in our annual club of 100 funds.
Sometimes it is impossible to find funds in a sector that outperform by this demanding margin of 5 and 10 percentage points, so we narrow the margin proportionally – to 4 and 8 percentage points, then 3 and 6 percentage points, etc.
Funds that underperformed the relevant benchmark over either one or five years are never included.
Click here to see the full list of FTAdviser 100 Club 2018 members.
Taha Lokhandwala is deputy personal finance editor for Investors Chronicle
