Of course three years is a completely arbitrary number but there are plenty of historic precedents to show that this is a better starting point than say two years. For example, there’s a decent chance it will cover varying market conditions and is long enough for performance to not be overly influenced by a single bet paying off or failing.
Here we take a look at funds that are headed up by an FE Alpha Manager who have only just passed a three-year track record on this portfolio, although they may run money elsewhere.
Majedie UK Income
FE Alpha Manager Chris Reid (pictured) has run this £640m fund since its launch in December 2011 alongside Yuri Khodjamirian.
Predominantly a FTSE 350 portfolio, it has returned investors 89.01 per cent since launch while the average fund in the IA UK Equity Income sector is up 53.25 per cent and the FTSE All Share gained almost half the ground made by the fund, 43.76 per cent.
Performance of fund, sector and index since 19 December 2011
Source: FE Analytics
This gives it the highest return in the sector since launch although its volatility is in the bottom decile of the sector.
Notable fans include F&C’s Gary Potter who recently pointed to Reid’s “improvement” style – which looks for companies that have already seen catalyst for positive change – as a way the fund has sought for dividend growth.
The fund has a clean ongoing charges figure (OCF) of 0.78 per cent.
MFS Meridian Global Concentrated
This $700m fund has been up and running since 2005 but FE Alpha Manager Roger Morley took over as lead manager in January 2012.
Since then it has stayed ahead of its MSCI World index benchmark as well as the IA Global sector average.
It has returned 70.77 per cent compared to the sector’s 56.96 per cent and the index’s 44.31 per cent, putting it in the top decile amongst its peers.
Performance of fund, sector and index since 1 January 2012
Source: FE Analytics
Sector and regional weightings have maintained a consistent balance over this period with the manager having his largest overweight to consumer products and the US. Five crown-rated, the fund’s largest holdings include Walt Disney, Visa and Fisher Price.
The fund has a relatively high OCF of 2.09 per cent.
Standard Life Global Equity Income
FE Alpha Manager Kevin Troup heads up this £122m fund which, as the name suggests, sits in the IA Global Equity Income sector. He took over 16 January 2012.
The manager sees himself as a bottom-up stock picker that will also keep an eye on macro themes as well as the goings-on of Standard Life’s other arms.
“This fund places a strong emphasis on dividend growing stocks – on companies that not only pay dividends, but have the potential to increase their dividend year after year,” Troupe said.
“This is what sets us apart from more mainstream income-paying funds, whose managers potentially screen out opportunity by only investing in stocks that pay a premium dividend.”
He says macro calls from Standard Life’s strategists convinced him to sell down Russian stocks in early 2014 before the markets material and ongoing crash.
The fund is up 52.98 per cent since the manager took over, just 1.5 percentage points ahead of the MSCI World index but more than 10 ahead of the sector average.
Performance of fund, sector and index since Jan 2012
Source: FE Analytics
This gives it the second best performance in its sector behind Jacob de Tusch-Lec’s Artemis Global Income fund, which is up 71.56 per cent over the same period.
The fund has a clean OCF of 0.87 per cent and currently has a yield of 2.23 per cent.
Standard Life Global Smaller Companies
Last up is another Standard Life offering, the £240m Standard Global Smaller Companies fund, which is co-managed Alan Rowsell and FE Alpha Manager Harry Nimmo.
While Nimmo has a much longer-term track record as a UK smaller companies manager, he has co-managed this fund since 19 January 2012.
It is up 44.16 per cent, less than its index but ahead of the IA Global sector average.
Performance of fund, sector and index since 2012
Source: FE Analytics
However, it was significantly ahead of both until mid and small-caps begun to take a battering in March 2014, since which it has lost 5.95 per cent but has started to climb again in recent months.
Top holdings include Hain Celestial, Win Trust Financial and Wabtec.
The fund has an OCF of 1.81 per cent.
