These are Investec Cautious Managed, Jupiter Merlin Income, Ecclesiastical Higher Income, Baillie Gifford Managed and AXA Framlington Managed Balanced.
The FE Trustnet study looked at the total return of funds in the IMA Flexible Investment and three Mixed Investment sectors over each year between 2008 and 2012.
Year-on-year performance of funds vs sectors
| Name | 2012 returns (%) |
2011 returns (%) | 2010 returns (%) | 2009 returns (%) | 2008 returns (%) |
|---|---|---|---|---|---|
| Jupiter Merlin Income | 10.12 | -0.63 | 12.46 | 17.42 | -10.84 |
| Investec Cautious Managed | 9.31 | -2.13 | 12.93 | 24.23 | -10.84 |
| Sector : IMA Mixed Investment 20% 60% Shrs | 8.35 | -1.89 | 8.56 | 15.90 | -15.84 |
| AXA Framlington Managed Balanced | 12.29 | -3.64 | 16.93 | 21.09 | -21.08 |
| Baillie Gifford Managed | 12.57 | -5.06 | 18.58 | 22.12 | -19.10 |
| Ecclesiastical Higher Income | 14.79 | -0.96 | 14.98 | 23.05 | -12.47 |
| Sector : IMA Mixed Investment 40%85% Shrs | 9.97 | -5.51 | 12.29 | 20.12 | -21.47 |
Source: FE Analytics
The standout performer across all four sectors is undoubtedly the five crown-rated Jupiter Merlin Income portfolio, headed up by FE Alpha Managers John Chatfeild-Roberts, Peter Lawery and Algy Smith-Maxwell.
A constituent member of IMA Mixed Investment 20%-60% Shares, the fund has beaten its sector average in each of the last 12 calendar years. One has to go back to 1999 when it last underperformed its peer group.
The £4.2bn fund has returned 31.55 per cent over a cumulative five-year period, beating the sector, which has returned 14.96 per cent over the period. Only six portfolios in the sector have returned more.
Performance of fund vs sector over 5-yrs
Source: FE Analytics
Although the fund has outperformed, it has also tended to be slightly more volatile.
It requires a minimum investment of £500 and is currently yielding 3.1 per cent.
The portfolio may not appeal to cost-conscious investors – with a total expense ratio (TER) of 2.33 per cent, it is one of the most expensive multi-asset funds out there.
Alastair Mundy’s £2.3bn Investec Cautious Managed is the only other fund in the IMA Mixed Investment 20-60% Shares sector that has registered first- or second-quartile performance in the last five consecutive calendar years.
The fund has outperformed Jupiter Merlin Income over this cumulative period, albeit with more volatility. Mundy, perhaps better known for his Investec UK Special Situations fund, is a contrarian investor, and is susceptible to steeper losses during down markets.
Turning to the IMA Mixed Investment 40%-85% Shares Sector, the three most consistent portfolios of the last five years have been Ecclesiastical Higher Income, Baillie Gifford Managed and AXA Framlington Managed Balanced.
FE Alpha Manager Robin Hepworth has run Ecclesiastical Higher Income since 1994 and the five crown-rated fund has beaten the sector in every year since 2005.
Over five years, the £172m fund has returned 45.31 per cent, making it the second-best performing portfolio in the sector, falling slightly behind McInroy &Wood Balanced over the period. Hepworth’s fund has also beaten the FTSE All Share index, which has returned 22.18 per cent over the same time.
Performance of fund vs sector and benchmark over 5-yrs
Source: FE Analytics
Ecclesiastical Higher Income has been considerably less volatile than the sector and its benchmark over five years, too.The Baillie Gifford Managed fund has been a top-quartile performer over five years, with returns of 32.22 per cent, and in the process has beaten its sector in every calendar year.
The £636m portfolio is managed by Elaine Morrison, Iain McCombie and Steven Hay. It counts other Baillie Gifford portfolios, such as Global Bond and Emerging Market Leading Companies, in its top-10 holdings. However, it is not an out-and-out fund of funds, and includes BHP Billiton and Imperial Tobacco in its top-10.
Richard Peirson's AXA Framlington Managed Balanced has arguably been the most consistent fund in the 40%-85% Shares sector in recent years.
The £407m fund has posted either first- or second-quartile returns every year since 2002; however, it has made less than Ecclesiastical Higher Income and Baillie Gifford Managed over a cumulative five-year period.
It also has a higher annualised volatility than those funds and the sector.
No retail funds achieved the feat in either the IMA Flexible or Mixed Investment 0-35% Shares sectors.
Our series has already considered the IMA UK Equity Income, IMA UK Smaller Companies and the IMA UK All Companies sectors.