The £1.3bn fund has made 100.14 per cent over the past half decade, while the IMA UK All Companies sector has made just 29.01 per cent, according to data from FE Analytics. It is now the most popular fund in its sector, having seen inflows of more than £650m in the past 12 months alone.
Many industry commentators say Dean’s success was one of the reasons why Schroders targeted Cazenove for a takeover.
The loss of star UK equity manager Richard Buxton to Old Mutual just weeks before the acquisition added fuel to this argument.
With investors scrambling to get access to the portfolio it is a good time to look at what is driving its success – particularly as it has not always done so well.
Dean’s style is built around attempting to call changes in the business cycle.
The central idea is that each stage of the cycle, such as the start of a recovery or recession, will come with a set of conditions that will be more favourable to some industries than others.
The manager and her team try to identify the current phase and select companies in sectors that are likely to benefit in each stage.
The idea is that by rotating into the right sectors at the right time the team can produce superior returns to the market.
The team categorises companies according to their behaviour within each phase of the business cycle and sensitivity to the market, and analyse the global and UK economies to determine what stage of the cycle each one is currently in.
It is an approach that has served Dean well in recent years, as the fund’s performance data suggests.
Performance of fund vs sector and index over 5yrs
Source: FE Analytics
However, it is a strategy that is highly dependent on the manager getting the big calls right and Dean has not always done that.
Prior to taking over the Cazenove fund in September 2002, she ran two funds for HSBC: HSBC UK Growth and HSBC British.
Her performance during that time was disappointing and she underperformed her peer group in the three years after she took over the first of these funds, in March 1999.
Our data shows her funds were down 21.82 per cent over this period compared with the 16.8 per cent lost by her peers.
Performance of manager vs peers 1999 to 2002
Source: FE Analytics
The market was doing so badly at that time because of the bubble in technology stocks that ended in the dotcom crash.
Rob Morgan, analyst at Charles Stanley Direct, says that Dean suffered because of her high weighting to tech stocks at the time.
Given that the manager’s style is built around her getting sector calls right, this is something investors need to bear in mind, Morgan says.
"She hasn’t always got it right," he explained. "Getting the business cycle right is supposedly her forte."
Amandine Thierree, FE Research analyst, agrees that this strategy is highly dependent on big macro calls, which is something investors need to consider.
"The major risk associated with the strategy is that it relies on Dean and her team to get the timing of their decisions right."
"If they call the beginning of an economic recovery early, the fund will suffer from jumping the gun and moving into unsuitable stocks."
"It wouldn’t necessarily produce a bad performance in such a scenario but it would lag its peers in the UK All Companies sector."
"The fund has the potential to offset this effect by catching the upside faster than its competitors, but nevertheless the set-up increases the uncertainty of its short-term performance."
Dean took a step back from managing the fund for a few years when she took maternity leave and some experts have suggested its performance suffered because of this.
It is certainly the case that it was run of the mill until 2008 and in her first five years at the helm it underperformed its benchmark and only outperformed its peers by the slenderest of margins.
Our data shows that between 9 December 2002 and 9 December 2007 the fund made 98.06 per cent while the FTSE All Share made 106.71 per cent.
Performance of fund vs sector and benchmark 2002 to 2007
Source: FE Analytics
The fund underperformed its sector average in each of the calendar years between Dean taking it over and 2008, with one exception – 2003.
It finished in the top quartile in 2008 because it protected capital better in the stock market crash, and has been top quartile in each year since then bar 2010, when it finished in the second quartile.
One of the most noticeable changes to the portfolio in its recent five years of outperformance has been the increased weighting to mid caps.
The fund was much more top-heavy prior to 2008, and over the next three years steadily developed a much larger mid cap weighting and even some exposure to small caps.
This has been a huge advantage as the mid caps have been by far the best-performing part of the UK market over the last few years, returning 63.96 per cent over the past half decade compared with 29.03 per cent from the index.
The fund currently has 40.1 per cent in mid caps compared with the 13.8 per cent of its FTSE All Share benchmark.
Morgan says this has undoubtedly helped the fund, although excellent stockpicking has also played its part.
He says investors need to remember that there have been periods when Dean has underperformed and when she has performed in line with her peers.
"I am not saying she is a bad manager, she has clearly done a really, really good job."
"But the whole Julie Dean phenomenon is a fairly short-lived thing. Although you could say five years is a long time, the fact that five-year performance figures are what people look at the most has certainly helped her."