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The multi-asset funds that have made you the most cash since Lehman’s collapse

21 September 2015

It has been just over seven years since the historic fall of one of the then world’s biggest banks and FE Trustnet looked at which multi-asset funds have returned the most cash since.

By Daniel Lanyon,

Senior Reporter, FE Trustnet

Diversified funds of investment trusts have overwhelming been the best multi or mixed asset funds to invest in since the fall of Lehman Brothers ushered in the financial crisis seven years ago, according to the latest FE Trustnet study.

Lehman Brothers fell on 15 September 2008 after it posted enormous write downs on toxic mortgages clocking up mammoth losses for the year and delivering a rout in its share price five days previously. After no intervention from government or financial institutions, the bank became the biggest write-down in corporate history. The global financial crisis followed.

Performance of indices in September 2008


Source: FE Analytics

As all readers are aware, the following six months resulted in the biggest bear market for equities in a generation with the knock-on effects of which lasting another six years in developed economies and arguably still ongoing in many regions. Incidentally, seven years is the rule of thumb for many market participants for a completion of the market cycle.

In an article later this week, we will look at the direct equity and bond funds in the Investment Association universe which have performed the best over that time.

However, in this article, we have taken a closer look with the more diverse IA Mixed Investment 0%-35% Shares, IA Mixed Investment 20%-60% Shares, IA Mixed Investment 40%-85% Shares and IA Flexible Investment sectors to see which portfolios have come out on top.

Looking at the entire performance of the  funds within the Investment Association universe that have a multi or mixed asset mandate since this time, our data show that the two best returns since the collapse seven years ago are funds that invest in other portfolios but specifically closed-ended vehicles.

Best performing mixed/multi asset funds since the collapse of Lehman Brothers



Source: FE Analytics


The standout performer, as the table above shows, has been Peter Walls’ £25m Unicorn Mastertrust.


Walls resumed responsibility of the Unicorn Mastertrust portfolio four days after the Lehman’s collapse, having initially launched the fund in 2001. It is the best performer in the sector since with a return just shy of 100 per cent. This compares to 44.84 per cent from the IA Flexible Investment sector average and 62.78 per cent from the FTSE All Share.


Performance of fund, sector and index since September 2008


Source: FE Analytics


The fund of investment of trusts is also top decile performer in its IA Flexible Investment sector over three, five and 10-year periods. A classic value investor, Walls tends to only invests in trusts that are on a discount, leading him to invest in out-of-favour portfolios with the potential for significant upside over the longer term.

Considered by many as one of the best investors in closed-ended funds in the UK, his stock-picking has been rewarded those with the best return as well in his sector and risk adjusted returns that are lower than many of his peers

Walls’ belief in finding value has led him to build up cash when markets are expensive, helping him to protect against the downside. Top-10 positions currently include Acorn Income (3.9 per cent) TR Property Investment Trust (3.9 per cent) and Foreign & Colonial Investment Trust and Caledonia Investments (3.8  per cent).

Arguably, it is not too surprising to see that the top-performing mixed/multi-asset portfolio since the crisis has been invested in investment trusts as these vehicles have generally outperformed the top-performing OEICs and unit trusts. Trusts’ ability to gear – or borrow money – means they tend to outperform during rising markets, and narrowing discounts have also provided an extra kicker.

However, these dynamics which move in real time with the market unlike their open-ended counterparts can also work against returns, of course. 

The Old Mutual Cirilium Dynamic fund also invests into other collective investment vehicles. It does mainly now hold open-ended funds but it also has 12.5 per cent in private equity currently.

However, Old Mutual Cirilium Dynamic previously had mostly invested in investment trusts over the seven year period but has more recently upped its exposure to


The two portfolios sit in the IA Flexible sector and, according to FE Analytics, Old Mutual Cirilium Dynamic has offered not only outperformance of the FTSE All Share but also had lower volatility over the past seven years showing better risk adjusted returns. The fund also beat the sector for both, albeit only just.

Old Mutual Cirilium Dynamic has been managed by Paul Craig since June 2008. It used to be called Henderson Cirilium Dynamic. It along with a host of portfolios in the Cirilium range were sold to Old Mutual Global Investors (OMGI) back in 2014, with Craig’s Dynamic offering being the most aggressive.

The new ownership seems to have preceded a switch into more open-ended vehicles as they previously mostly in investment trusts which like Unicorn Mastertrust clearly worked in favour of outperformance.

Five funds in the range managed by Craig managed to beat equities during the 2011 bear market, according to our data including Old Mutual Cirilium Dynamic which lost less than FTSE All Share – just.

However, while it is ahead of the FTSE All Share in the more recent bear market this year it is not ahead of the sector average. It largest holding is the Neptune Japan Opportunities managed by FE Alpha Chris Taylor.

Other multi-asset funds among the list of top-performers since the collapse of Lehman Brothers include Kames Ethical Cautious Managed, Fidelity MoneyBuilder Balanced and Newton Osprey.

Some of the worst performers, however, include Thesis Optima Multi-Asset Strategy, Sarasin Equisar and JPM Cautious Managed which have on average returned less than 12 per cent over the past seven years with higher than average maximum drawdowns. 

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.