Multi-managers’ top-10 funds

Aberdeen Emerging Markets, Invesco Perpetual Income and First State Asia Pacific Leaders are among the most popular funds held by multi-managers, the latest FE Trustnet study can reveal.

Few will be surprised to learn that these highly regarded and highly publicised funds are being held by professional fund managers as they have all been best-sellers among retail investors at some time.

Looking at the stocks held by multi-managers is a popular method used by equity traders for finding ideas. By categorising the most popular funds held by multi-managers long-term, investors can also find ideas for open-ended products.

Funds most held by fund-of-funds managers

Artemis Income

First State Asia Pacific Leaders

Findlay Park American

AXA Framlington UK Select Opportunities

Aberdeen Emerging Markets

GLG Japan Core Alpha

JOHCM UK Opportunities

Schroder UK Alpha Plus

Invesco Perpetual Income

Fidelity Moneybuilder Income

Source: FE Analytics

With the exception of JOHCM UK Opportunities and Schroder UK Alpha Plus, all of the funds on the list have a track-record of more than 10 years, showing that professional investors put a great deal of emphasis on buying consistent funds where managers have a repeatable investment strategy that is proven to work.

"Most of the funds on this list also appear on our buy list," said Juliet Schooling-Latter, head of research at Chelsea Financial Services. "The fact that so many people are interested in these funds - including the professionals - goes to show that these guys are consistently the best managers in the business."

She added: "So long as you have most of these managers in your portfolio, you’ll probably be in a good position over the long-term."

Six of the nine UK-domiciled funds are headed-up by FE Alpha Managers. Some of the names are the most recognisable in the industry; Neil Woodford, Angus Tulloch, Stephen Harker and Ian Spreadbury. This underlines the importance of having exposure to the most consistent and reliable managers who have shown the ability to perform in all market conditions.

The Aberdeen Emerging Markets fund is run according to a team approach and therefore cannot qualify for the FE Alpha Manager rating; however, the team has given an annualised total return of 13.5 per cent over the 11.9 years.

The most popular fund, Artemis Income, is co-managed by Adrian Frost and Adrian Gosden. The managers run this £3.7bn equity income fund with an unconstrained approach. Data from FE Analytics shows that over the last decade, it has returned 112 per cent compared with 68.29 per cent from the sector average. It has also outperformed Woodford’s Invesco Perpetual Income and High Income funds over the last three years.

Findlay Park American will seem like a surprise inclusion for retail investors. Domiciled in Ireland, it is difficult for the average investor to get access to. However it has returned 218 per cent compared with 49.77 per cent from its benchmark, a composite of the S&P 500 and the Russell 2000 indices.