Top funds you’ve never heard of: UK All Companies
Giles Hargreave’s Marlborough UK Leading Companies makes a surprise entry onto the list of top-performing funds with a relatively small amount of assets under management.
By Joshua Ausden, News Editor, FE Trustnet
Monday August 20, 2012
IMA UK All Companies is by far the largest sector in the open-ended universe, offering investors 297 options with combined assets under management (AUM) of almost £100bn.
More than half of this money is invested in the sector's 20 largest funds. While some of these no doubt deserve their mass inflows, there are a number of smaller, lower-profile portfolios that are more than a match for these industry heavyweights.
Here are three top-rated funds that have slipped under investors' radars:
IM Matterley Equity
The stellar performance of Chris Harris
and Chris Evans’
£8.1m fund is not in keeping with its sparse assets under management (AUM).
According to FE data, it has returned 58.24 per cent since its launch in March 2006, compared with 26.87 per cent from its FTSE 350 benchmark and 18.88 per cent from its sector average.
It has also been less volatile than both over these periods and lost less during the 2008 downturn.
Performance of fund vs index and sector since March 2006
Source: FE Analytics
IM Matterley Equity is also a top-quartile performer over one, three and five years, as well as over six months.
Of the few funds that have returned more over three and five years, most have been significantly more volatile – particularly those with a mid cap focus.
IM Matterley Equity's consistency is likely to be a particular draw: according to FE Analytics
, it has beaten its sector average in each of the last five calendar years.
The fund invests predominantly in FTSE 100 stocks, although it is less exposed to blue-chip dividend-payers compared with many of its rivals.
Its top-10 holdings include Vodafone, BAT and GlaxoSmithKline, as well as much smaller companies like Rexam and Croda. The portfolio has around 40 to 50 positions, with no company having more than a 3.2 per cent weighting.
It has a minimum investment of £1,000 and a total expense ratio (TER) of 1.6 per cent. The fund isn’t available on most of the largest platforms, but can be bought directly.
Marlborough UK Leading Companies
It is somewhat surprising that this sector-leading fund, headed up by star manager Giles Hargreave, has a mere £75m AUM.
Hargreave is best known for his small cap-focused Marlborough Special Situations fund, but this all-cap portfolio has a record to rival it.
According to FE data, it has returned 185.78 per cent in the last decade, compared with 93.11 per cent from the average UK All Companies portfolio and 105.98 per cent from the All Share. Only seven funds in its sector have returned more.
Performance of fund vs index and sector over 10-yrs
Source: FE Analytics
It is also a top-quartile performer over three and five years, with returns of 60.27 and 37.36 per cent respectively.
In spite of Hargreave’s overweight position in mid and small caps, his fund has exactly the same volatility as its sector average over 10 years. Ashtead Group, a constituent of the FTSE 250 index, is one of his top-10 holdings.
The fund has a minimum investment of £1,000 and a TER of 1.55 per cent.
This five crown-rated portfolio is certainly the most adventurous of the three, thanks to its significant exposure to mid caps and cyclical stocks in the oil & gas and industrial sectors. Nautical Petroleum, Faroe Petroleum and XP Power are all top-five holdings.
The £58m fund, managed by industry stalwart Paul Mumford, is significantly more volatile than both its sector and tends to lose more during market downturns; however, its stellar record during rising markets has led it to the top of the performance tables in the medium- and long-term.
Performance of fund vs sector and index
Source: FE Analytics
||1-yr returns (%)
||3-yr returns (%)
||5-yr returns (%)
||10-yr returns (%)
|Cavendish - Opportunities
|IMA UK All Companies
|FTSE Small Cap Index (ex IT)
According to FE data, it is a top-quartile performer over three, five and 10 years, and has outperformed over one year as well.
prides himself on being a long-term investor and pays little attention to the macro environment, instead concentrating on bottom-up analysis.
His fund has a minimum investment of £2,500 and a TER of 1.58 per cent. It uses the FTSE Small Cap ex IT index as its benchmark.