In most cases, the bereaved has little-to-no experience in investment, and is more than satisfied leaving his/her estate in the bank – a dangerous game given low interest rates and high inflation.
While low-risk gilts and corporate bonds have been the weapon of choice for most investors in their old age, Thames River’s Gary Potter believes there is little point putting money in these kinds of assets, even on a short- to medium-term basis.
"Unless it’s a strategic position I see no reason in holding cash or fixed interest at the moment if you’re anything like a long-term investor," he said.
"Fear is currently taking prominence over fundamentals. I can understand why people might look at cash, but bonds – and particularly sovereign bonds – are a bad asset in my eyes."
"If you’re approaching retirement or even if you’ve retired, I think a good quality and well -diversified global equity income fund is a much better shout on a five- or 10-year view."
The manager points to a number of possibilities, but rates the £1.8bn Veritas Global Equity Income fund as his number-one choice.
"This is very much a sleep-at-night kind of fund," he explained. "It’s very consistent and has a good yield as well."
"It is well known among professional fund managers but not widely used by private investors and, as far as I know, does not appear in model portfolios because it is offshore."
"People are immediately turned off by the added complexity of dealing with Dublin."
"It’s one of the few funds that I’d buy with my own money every day of the week without even thinking. Anybody who is in the market for the medium- or long-term should be holding it."
The £1.8bn Veritas Global Equity Income fund has the most consistent record in its Global Equity Income sector over the past five years.
Performance of fund vs sector and index
| Name | 1-yr returns (%) | 3-yr returns (%) | 5-yr returns (%) | 10-yr returns (%) |
| Veritas Global Equity Income | 7.08 | 51.92 | 50.11 | N/A |
| IMA Global Equity Income | 3.07 | 42.28 | 10.65 | 72.91 |
| MSCI WORLD | -0.31 | 40.48 | 9.65 | 88.95 |
Source: FE Analytics
According to FE data, it has returned 92.7 per cent since launch in February 2005, the highest figure in its sector over this period and beaten by only eight funds in IMA Global.
The portfolio also tops its sector over five years and is a top-three performer over one and three years as well, with returns of 7.08 and 51.92 per cent respectively.
As well as topping the returns table, the fund is less volatile than both its sector average and MSCI World benchmark and has a lower max drawdown over one, three and five years.
Performance of fund vs sector and index since launch
Source: FE Analytics
As a result, its Sharpe ratio – which calculates risk-adjusted returns – is consistently the highest of its peer group; over five years it scores 0.3, with the second-best fund posting 0.07.
Its running yield of 4.6 per cent is also one of the highest in its sector. Dividends are paid twice a year, in March and September.
The fund has been headed up by Charles Richardson and Andy Headley since its launch back in 2005. The pair also manage the $1.4bn Veritas Global Focus portfolio, which like Veritas Global Equity Income, has five FE crowns.
Richardson and Headley are currently overweight Asia Pacific ex Japan, which makes up 33.8 per cent of assets under management (AUM).
They have a further 4.5 per cent in Africa & the Middle East and 2.3 per cent in Latin America. North America remains an underweight position in the portfolio.
The managers claim the markets are currently "schizophrenic", as a result of experimental policy from central bankers, governments and regulators.
"All the traits of schizophrenia are on display: changeability (flip-flops and significant sectoral rotations), delusions (a belief in problems actually solved rather than postponed) and irrational beliefs (over-confidence in forecasting or certainty of outcome)," they said in a recent note to investors.
"Due to this, we believe as strongly as ever that we need to work on identifying individual companies across all sectors with the ability to sustainably perform and deliver."
"These companies need to be resilient to whatever the economic out-turn is on a three- to five-year view and beyond."
Vodafone, Roche and Petrochina are among the managers' biggest positions at present.
For anyone who can’t afford the minimum investment of £30,000, this fee is waived by a number of platforms. For example, there is a minimum investment of just £1,000 with Hargreaves Lansdown.
Veritas Global Equity Income has a total expense ratio (TER) of 1.18 per cent – well below average for a global equity fund, or any equity portfolio for that matter.