Consistency is one of the most valuable, but often overlooked, qualities in fund investment. The focus on table-topping funds means that investors frequently ignore the steady but unspectacular performers that manage to achieve an above-average position in the charts year after year.

Yet funds that can deliver this sort of consistency are actually quite rare, says F&C, the fund manager. Its multimanager team has looked at more than a dozen different fund sectors and worked out how many funds have achieved a position better than mid-table in their sector in each of the past five years.

Richard Philbin, of F&C, says: “The startling result is that only a handful of funds have managed to meet this standard. Out of 245 funds in the UK all-companies sector, only 13 funds delivered above-average performance five years in a row. Among the funds that passed the F&C test are the mid-cap funds from Rensburg and Old Mutual, along with Fidelity Special Situations and M&G Recovery.

“In the North American sector only one fund - Martin Currie North American - achieved this, while in the Japan sector not a single fund managed to meet the target for five consecutive years.”

One sector that did produce a good crop of consistent performers was the equity income sector, where no fewer than five funds out of 71 made the grade, including two Invesco Perpetual income funds and the Artemis Income fund.

Both Mr Philbin and Dean Cheeseman, who together run F&C's stable of multimanager funds, say that consistency is one of the key elements they look for when selecting funds for their portfolios. Mr Cheeseman says: “There is a natural tendency for investors to concentrate their attention on the funds that happen to be topping the performance league tables. But funds at the very top of the charts at any given time are often shooting stars that have a strong style bias or have taken big bets. In many cases their performance reverses as markets change.”

Tim Cockerill, of Rowan & Co, the independent financial adviser, is another who values consistency and has produced his own set of fund ratings, based not only on out-and-out performance, but also on consistency and lack of volatility.

This can result in very different gradings for funds that have very similar cumulative performance. For example, the Liontrust First Growth fund and the Baring UK Equity Mid Cap fund have both returned about 50 per cent over the past three years. But while the Liontrust fund receives a very high A-minus rating because of its consistency of performance, the Baring fund collects a lowly D-plus because of its much greater volatility.

In the same way, the Threadneedle UK Select and Standard Life UK Opportunities funds have both returned 38 per cent over three years, but the steadier Threadneedle fund merits a B grade while the Standard Life fund scores a humble D-minus.

Mr Cockerill says: “Cumulative performance figures have their value, but they do not tell you how consistent or volatile a fund has been. You need to look under the bonnet and see what else is going on.

“For example, a fund that doubles in value over six months but then does nothing for the next two and a half years would have a good cumulative return over that three-year period. But it is only by looking at the more precise year-on-year figures that its underlying erratic performance would be revealed.”

A similar sort of consistency test is equally good at identifying many of the best-performing investment trusts. Any trust that has been in the top half of its sector for five years running is likely to be a very good trust indeed. Among the few that meet this exacting test are SVM Global and Hansa Trust A shares.

Mr Cockerill adds: “Although the consistency test is a very good tool for identifying some really solid performers, investors should not worry too much if a generally consistent manager has a brief spell of poor performance. This is almost inevitable at some point, because investment styles tend to go in and out of fashion with the market cycle. We prefer managers to stick to their styles, rather than follow the fashion, because they should come good in due course.”

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