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Five 2014 fund launches – apart from Woodford – that should be on your radar

10 January 2015

Though Neil Woodford grabbed the headlines with his highly popular fund launch last year, a number of other experienced managers brought new portfolios to the market in 2014.

By Alex Paget,

Senior Reporter, FE Trustnet

The launch of the CF Woodford Equity Income fund was by far the biggest piece of news within the fund management industry last year.

After spending more than 25 years at Invesco Perpetual, star manager Neil Woodford brought his new portfolio to the market in June last year and investors lapped it up – the fund’s AUM has already surged to £4.3bn with unitholders hoping he can repeat the outstanding performance achieved as manager of the Invesco Perpetual High Income and Income funds.

However, while Woodford received the most column inches, investors shouldn’t forget that another 156 funds entered the IA universe last year.

In this article, we look at five of them which are either run by experienced managers who have built up track records on other funds, are run by small but expanding groups that are gaining more traction with investors or are based on existing strategies that have already proved popular in the UK market.


Majedie Global Focus

The first on the list is Majedie Global Focus, which opened to investors in June last year and is headed up by Adrian Brass, Tom Morris, Tom Record and Yuri Khodjamirian.

The concentrated portfolio is run in a similar vein to the five-crown rated Majedie UK Focus fund, which according to FE Analytics, has been a top quartile performer in the IMA UK All Companies sector – and has beaten the FTSE All Share – over one, three, five and 10-year periods.

The £512m UK fund has also beaten its sector and benchmark in nine out of the last 10 calendar years.

Over the short period since its launch, Majedie Global Focus has slightly outperformed the IA Global sector with returns of 6.51 per cent in sterling terms. However, that outperformance has come over recent weeks, as the graph below shows.

Performance of fund vs sector since June 2014
     

Source: FE Analytics

Brass, Morris, Record and Khodjamirian hold 47 stocks. Their largest regional weightings are the US, UK and Italy while their list of top 10 holdings include Orange, Time Warner and Taiwan Semiconducter.

The fund has an ongoing charges figure (OCF) of 1.1 per cent.


TM Sanditon European Select

Next on the list is TM Sanditon European Select, which was launched last August by the ex-Cazenove duo of Tim Russell and Chris Rice.

The duo also hired FE Alpha Manager Julie Dean from Schroders in the autumn, who will take charge of a UK fund later this year.

Russell and Rice, like Dean, follow the business cycle approach to investing, whereby they shape their portfolio to suit the state of the economy and market. The fund has already attracted £80m, though it currently sits in the IA Unclassified rather than Europe ex UK sector.

Rice has a great deal of experience in the European market. He managed the Schroder (then Cazenove) European Opportunities fund between December 2002 and June 2013, over which time it was a top quartile performer.

The Schroder fund, which is now headed up by FE Alpha Manager Steve Cordell, delivered a return of 188.26 per cent while Rice was in charge, beating its benchmark by more than 20 percentage points in the process.


Performance of fund vs sector and index between Dec 2002 and Jun 2013



Source: FE Analytics

The new TM Sanditon European Select fund has struggled over its short lifespan, however, and is down 4.67 per cent since launch while its FTSE World Europe benchmark is up 2.8 per cent.

Nevertheless, the fund has already gained traction with the experts as Robin McDonald and FE Alpha Manager Marcus Brookes already hold it across their Schroder MM range. It has an OCF of 1.43 per cent, excluding a performance fee.


Standard Life Global Emerging Markets Equity Unconstrained

Standard Life has had great success with Ed Legget’s UK Equity Unconstrained and Thomas Moore’s UK Equity Income Unconstrained funds, which have both dominated their respective IA sectors since the period after the financial crisis.

To capitalise on the outperformance of those portfolios and their popularity with investors, the group launched a similarly benchmark-agnostic fund which focuses on the developing world.

Standard Life Global Emerging Markets Equity Unconstrained, which is headed up by Matthew Williams, launched into the IA universe in October 2014, though a mirror portfolio has been up and running in the offshore universe since October 2012.

According to FE Analytics, the offshore version has significantly outperformed its sector over that time with returns of 21.12 per cent in sterling terms. As a point of comparison, the MSCI Emerging Markets index is up 9.66 per cent.

Performance of fund vs sector and index since Oct 2012



Source: FE Analytics


The fund has a very different looking list of top 10 holdings compared to most IA Global Emerging Markets portfolios, though Williams holds some more recognisable names such as Baidu and Samsung Engineering.

It must be noted that most of the track record was built under the leadership of Ross Teverson, who left the firm in 2014. However, Williams is well versed in the process, having been deputy manager on the offshore fund since launch.

The new fund has a total expense ratio (TER) of 1.33 per cent.
 

Artemis US Select

One of the biggest fund manager moves in 2014 was Cormac Weldon’s decision to leave Threadneedle and join Artemis.

He and his team are considered one of the best in the US equity space, which is an area of the market where fund managers usually struggle to outperform.

However, during his tenure as manager of the Threadneedle American Select fund – which he ran between November 2001 and January last year – the fund was a top quartile performer in the IMA North America sector with returns of 101.03 per cent and more importantly it beat its S&P 500 benchmark by over 20 percentage points.

Performance of fund vs sector and index between Nov 2001 and Jan 2014



Source: 
FE Analytics

His new Artemis US Select fund was launched in September last year, over which time it has returned 10.03 per cent which places it above the sector average over the period but below the index which gained 12.45 per cent in sterling terms.

Data on the fund’s holdings isn’t yet freely available, but the fund is a “best ideas” portfolio of around 40-60 holdings and Weldon will invest lower down the market cap in search of higher returns.

Artemis US Select has an OCF of 0.94 per cent.
 

PFS Chelverton UK Equity Growth

The final fund on the list is the PFS Chelverton UK Equity Growth fund, which is headed up by James Baker and is the smallest of the five as its AUM is below £3m.

However, Chelverton has become increasingly popular with investors as a result of the performance of its five crown-rated UK Income fund, which is managed by David Taylor and David Horner.

The multi-cap income fund has swelled to £350m due to its strong performance, turning in top decile returns and comfortably beating its FTSE All Share benchmark over five years. It has also been one of the best performers in the IA UK Equity Income sector for its income generation.

The group decided to expand their fund range, with Baker’s UK Growth fund opening its doors to investors in October.

According to FE Analytics, it has returned 4.55 per cent over that time, which means it is up against the index but down against the IA UK All Companies sector. Nevertheless, as the graph below shows, it has been far less volatile during the recent corrections than both the sector and index.


Performance of fund vs sector and index since Oct 2014



Source: FE Analytics

Baker’s investment universe is everywhere within the UK market except the FTSE 100 and the manager uses both a qualitative and quantitative approach to picking companies.

PFS Chelverton UK Equity Growth has an OCF of 0.75 per cent.

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