Top FE Alpha Managers you may never have heard of
Jeremy Gleeson, Tim Wood and Simon Knott have consistently returned more than their peers but their position in unfashionable sectors means their strong performance has gone unnoticed by the majority of investors.
By Mark Smith, Reporter, FE Trustnet
Tuesday April 17, 2012
While some of the industry’s most recognisable figures such as Angus Tulloch
, Alister Hibbert
and Evy Hambro
consistently top long-term performance tables, there are a handful of managers from lesser-known houses who may have escaped your attention.
Here FE Trustnet
rounds up some of the leading FE Alpha Managers* from specialist areas that are worth considering for your portfolio.
Jeremy Gleeson, AXA Framlington
With returns of 76.6 per cent in the last five years, Jeremy Gleeson
is the fifth best-performing FE Alpha Manager in the entire IMA universe during this time.
Gleeson’s £202.2m AXA Framlington Global Technology
fund consistently appears at the top of performance tables. Returns of 88.58 per cent and 118.19 per cent over the last five and 10 years respectively are unmatched by any of the funds in its peer group.
Many investors still remain reluctant to invest in the Technology & Telecoms
sector having had their fingers burnt when the dotcom bubble burst in 2000. However, since then, corporate governance in technology companies has improved significantly and lessons have been learnt to prevent valuations reaching the unfathomable levels they reached in the heady days of the late 1990s.
While much of Gleeson’s returns derive from the high-Beta nature of the technology sector, which grows quickly when equity markets rally, he has consistently added value ahead of the general trend.
FE data shows that over the last five years the AXA Framlington Global Technology fund has an Alpha ratio of 2.43 – more than any other fund in the sector. Alpha is a measure of how much value a manager has added to his/her benchmark.
The fund is invested in companies engaged in the research, design and development of technologies in a range of sectors. Investor favourites Apple, Google and Ebay feature in its top-10 holdings.
Tim Wood, McInroy & Wood
With a score of 10.99, Tim Wood's
McInroy & Wood Smaller Companies fund has a better Alpha ratio than any other in its Global
sector over the last decade.
The £41.5m fund is one of the few products available to UK investors that targets global companies from lower down the capitalisation spectrum.
Our data shows that returns of 200.94 per cent over the last decade have only been bettered by fellow FE Alpha Manager Graham French’s M&G Global Basics
fund. McInroy & Wood Smaller Companies is also a top-decile performer over three and five years.
Most of the funds from within the Global sector are concentrated in the most liquid and heavily traded stocks. Wood’s investment style looks to exploit the fact that smaller companies, without a large institutional following, can be found at much more attractive valuations.
While the fund has five crowns under the FE Crown Fund Rating system, it is worth noting that the £10,000 minimum initial investment puts it out of reach of the majority of private investors.
Simon Knott, Discretionary UT Managers
Small caps tend to lead market rallies for a number of reasons: they can use increased revenues to dramatically grow the size of the company when the wider economy is performing well; higher trading volumes can lead to inflated share prices as investors fight for the best-quality stocks; and the increased likelihood of M&A activity can also boost share prices.
In the three years since the Lehman Brothers crash, FE Alpha Manager Simon Knott's
£24.7m Discretionary fund has returned 155 per cent, more than any other in the UK Smaller Companies
sector. It has also beaten the benchmark over the last decade.
The fund has an Alpha ratio of 14.63 over three years, which vindicates Knott’s reputation as a talented stock-picker.
With a total expense ratio (TER) of just 1.1 per cent, the portfolio is one of the cheapest UK Smaller Companies funds on the market. It has a minimum investment of £3,000.
*The FE Alpha Manager rating is awarded to the top 10 per cent of fund
managers, judged by the amount of value they add in both rising and