Mixed asset funds: Premier League Nov 15 update
13th November 2015 15:00
by Rebecca Jones from interactive investor
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Flexible investment sector
7IM Adventurous
The £124 million fund is a multi-asset vehicle. However, it resides in the flexible investment sector to be free from the investment constraints applied to funds in other mixed-investment sectors.
It has a well-diversified portfolio of around 350 holdings, but the top 10 account for 44% of the total fund. Its biggest holdings are in punchy derivatives.
Over the short term, this exposure has done the fund no favours at all: Asian markets have tumbled, and the fund shed more than 10% in the three months to 31 August and 5.8% over one year.
In the longer term, the picture is much rosier. 7IM outperformed the sector by 15% over three years and five years to the end of August.
Despite the warning issued in its mandate that "there is a risk of wide fluctuations in capital values", over the past three years the fund has on average managed to stay in the second decile throughout.
Browse Money Observer's Premier League 2015
The fund currently has a high exposure to emerging markets (around 23%), and it faces a bumpy ride over the short-to-medium term. However, its largest regional exposure is to Europe (25%), which should help dampen volatility, as should its 15% in the UK and 17% in the US and Japan.
Mixed investment 40-85% shares sector
Royal London Sustainable World Trust
One of our sister magazine Money Observer's Rated Funds, success proves that investors do not have to sacrifice principles for profits.
The sustainability-focused fund is ranked in the top three funds of the 136-fund mixed investment 40-85% shares sector over one, three and five years. Its consistency score of 2.1 is also one of the best in our league.
Fund manager Mike Fox explains that the fund's sustainable, responsible investment strategy has driven the portfolio, rather than hindering it.
He says: "Our focus on growing, innovative companies that have a positive impact on society has been the main reason for our outperformance.
"This has led to the fund taking holdings in areas such as healthcare that have performed well, and avoiding commodity stocks, which have underperformed."
Fox argues that, with growth in most economies now limited, particularly in the developed world, growth in corporate profits is likely to "have to come from innovation and the creation of products with a tangible benefit to society". As a result, he continues to favour healthcare and technology companies.
Mixed investment 20-60% shares sector
Artemis Monthly Distribution
has been a consistent top performer since its launch in May 2012, rarely leaving the first quartile of the mixed-investment 20-60% shares sector.
Over three years, it was the best performer among its peers, returning 40% - marginally ahead of its nearest competitor, , and 23% ahead of the sector average.
The fixed-income portion of the fund, which accounts for close to 55% of the total portfolio, is managed by the highly experienced James Foster.
The equity portion is managed by Jacob de Tusch-Lec, who also runs top-performing Money Observer Rated Fund . Together, the managers generate a 4.2% annual yield, placing the fund in the top 10% of the sector for income.
The fund has recently been hit by its exposure to high-yield bonds, which suffered during the summer rout, leading to a rare third-quartile performance over one month.
In equities, de Tusch-Lec says the August volatility has not "turned [them] into bears"; he is keeping an eye on opportunities that may arise from a cheaper oil price, for example in consumer-focused companies.
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This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.