Markets had another turbulent week, with the FTSE 100 of Britain’s leading shares plunging 75 points on Friday because of the Northern Rock crisis, though it was still up on the week.

Analysts say shares are likely to remain volatile for some time as traders digest the full impact of the credit crunch.

In erratic times, the holy grail for investors is a fund manager who delivers good returns in bull and bear markets. To that end, we asked two of the UK’s leading fund-research firms to do an exhaustive analysis of the industry and come up with their pick of the “sleep-easy” schemes – funds that have delivered regardless of market conditions.

Bestinvest, an independent adviser, looked at the monthly performance of every fund manager over the past five years and over their careers to find the ones that have consistently beaten their benchmark. It then subjected them to a rigorous analysis to see how much of their performance was down to skill, and how much to luck.

Citywire, a financial website, conducted a similar exercise, highlighting those who had come in the top 20% on a monthly basis in the past five years.

We then looked for names that appeared in both surveys to come up with our top five.

Mark Hinton, analyst at Bestinvest, said: “The funds below are managed by high-quality managers with long-term track records of consistent outperformance. Their funds have been tested in both bear and bull-market conditions and demonstrate managers who either have excellent insight in their respective markets, and/ or who have pragmatic investment styles that allow them to achieve outperformance over an investment cycle.”

Jupiter High Income

Anthony Nutt has run this fund since 1996. It is managed along similar lines to the Income Trust, though it has an added requirement to hold at least 20 per cent in fixed-interest bonds, which give extra security in troubled times.

He has a big weighting in financial stocks; this has hit performance to some extent this year, although he has avoided those that have been hardest hit, such as Northern Rock and Barclays.

Hinton said: “He likes to take positions in companies that appear undervalued by the market and has added value over both bear and bull-market conditions, although it is most noticeable during bear markets.”

In the last 10 years, the fund has soared 217 per cent compared with 92 per cent for the FTSE All Share.

Rensburg UK Select Growth

Mark Hall has managed this fund since launch in 2001 from the firm’s base in Leeds. He goes for either growth or income stocks, depending on the underlying conditions, helping him to perform well in all markets.

Jonathan Miller of Citywire said: “Hall is convinced that being outside London helps him concentrate on managing rather than marketing, and this has certainly contributed to his exceptional performance.”

Over the past five years, his fund is up 142 per cent compared with 57 per cent for his benchmark.

M&G Recovery Fund

Tom Dobell has delivered returns of 117 per cent over five years and advisers say this could be the perfect time to buy his fund.

He focuses on troubled companies where a good management team is making concerted efforts to turn the business around. Dobell seeks opportunities among stocks that are often not widely followed by the investment community at large, such as Superscape Group, a games publisher, and Whitecroft.

Bear in mind that, as a result, his portfolio has a larger exposure to medium-sized and smaller companies than its benchmark, the FTSE All-Share index. However, the higher risk seems to have produced results.

Invesco Perpetual Income

Neil Woodford is one of the best known equity-income managers in the country and has delivered stellar returns of 259% over the past 10 years.

Hinton said: “He offers investors something different, in that when he has strong views he is prepared to back them to the hilt. Therefore, it is not unusual for his portfolios to have a completely different shape to their benchmarks, avoiding some large sectors completely.”

His portfolio is heavily in traditional defensive sectors that tend to perform well even when the economy is slowing, such as gas, water and electricity firms.

He was also the biggest shareholder in BAA, the airports operator taken over by Ferrovial last year, and is thought to have made about 50 per cent on the deal. He also has a stake in ICI, which recently agreed to a takeover by Akzo Nobel, sending the shares soaring.

Midas Balanced Capital

This is a fund for the cautious. Midas Capital is an independent, owner-managed firm run by Alan Borrows. The fund’s objective is to provide a good yield and the prospect of capital growth without undue risk.

The portfolio invests in everything from equities and bonds to private equity and is yielding 5.4 per cent. It has returned 177 per cent over the past five years.

TAKING A LONG-TERM VIEW WITH JUPITER

Nicola Burgess and her husband Jason invested part of a £7,000 windfall in the Jupiter High Income trust, managed by Tony Nutt, more than four years ago and have been pleased with the results.

Burgess, who looks after her two children – Olivia, four, and Constance, six months – at their home in Rochester, Kent, said: “We are financially aware, but do not want to be following our funds all the time. We wanted something that would let us sit back and relax, and Jupiter seemed to have a consistent record.”

She is not too alarmed by the market chaos. “Our investment may have turned down a bit, but I hope that over the next five or six years it will recover.”

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