Investors with established portfolios who are on the hunt for new ideas may want to think about these hidden gems from unloved or overlooked sectors.


SVM All Europe SRI

Many investors fled European-focused funds following the sovereign debt crisis, meaning many stocks in the region are now very attractively valued.

Recent policy action has shown that the banking system will not be allowed to fail and has the full support of the European Central Bank (ECB) and the International Monetary Fund (IMF). There is a general feeling that the worst-case scenario has been priced into European equity markets and stability has been restored.

The SVM All Europe SRI co-manager Neil Veitch commented: "LTRO changed the landscape quite considerably; in my opinion it is a game-changer and has taken out a lot of the downside risk."

Performance of fund vs sector over 3-yrs



Source: FE Analytics

Sitting in the Europe inc UK sector, Veitch’s fund is one that many investors may have overlooked. However, its performance figures are difficult to ignore.

Data from FE Analytics shows that it is by far the top-performing fund in its own sector over three and five years and it has also beaten most of the competition in the Europe ex UK sector. Over the last three years it has returned 108 per cent. Only Invesco Perpetual European Opportunities has a better record over the period.

Veitch manages the £8.2m fund alongside Hugh Cuthbert. It has five crowns under the FE Crown Fund Ratings system.


Ecclesiastical Higher Income

This £151m fund is in the UK Equity & Bond Income sector. This means it has the freedom to split assets between fixed income securities and stocks depending on where the manager sees opportunities.

This extra flexibility has helped the performance of the fund versus its peers in the UK Equity Income sector.

With returns of 36 per cent over the last five years, FE Alpha Manager Robin Hepworth, who heads up the fund, has outperformed the likes of Neil Woodford and Francis Brooke who run pure equity portfolios.

Performance of fund vs sector over 5-yrs



Source: FE Analytics

Hepworth’s emphasis on preserving capital in down markets has seen the fund’s performance dip in the rally of the last three years. However, with returns of 55.88 per cent, it has still beaten the average UK Equity & Bond portfolio over the period.

This approach also meant that Hepworth performed well when markets were hit by the financial crisis in 2008.

The fund has been the second-least volatile in its sector over the last five years, behind only F&C High Income. However, Ecclesiastical Higher Income has returned nine times as much.

The yield on the fund is 4.53 per cent so it will suit investors looking for a sustainable and high income.


Aberdeen Asia Pacific & Japan

Seasoned investors will be familiar with the £2.2bn Aberdeen Asia Pacific portfolio, which has been one of the best performers in the Asia Pacific ex Japan sector over the last decade. However, fewer investors will know much about the £224m Aberdeen Asia Pacific & Japan fund.

As the names suggests, the former does not invest in Japan while the latter does. In the past Japan has held back the region as a whole but economists and professional investors are now becoming more positive on the region.

That view is reflected in the performance figures. Aberdeen Asia Pacific has outstripped the Asia Pacific & Japan fund over three, five and 10 years but the latter has the edge over the last 12 months.

Performance of funds over 10-yrs

Name	6m	1yr	3yr	5yr	10yr
Aberdeen - Asia Pacific & Japan	12.98	6.41	81.07	59.17	191.83
Aberdeen - Asia Pacific	13.51	2.91	91.96	74.9	247.64

Source: FE Analytics

For investors who believe Japan's strong performance will continue but who don't want to put all their eggs in one basket, this fund could be the perfect option.