Schroders beats M&G in portfolio test
The top-rated Schroder Asian Income, Schroder International Bond and Schroder US Mid Cap funds contributed greatly to performance in our study.
By Mark Smith, Senior reporter
Monday July 30, 2012
has emerged as the best performing house of the last five years in the sectors which matter most to investors, according to the latest FE Trustnet
research into the investment management industry’s best-known product providers.
Focusing on five key asset classes – UK growth, overseas growth, equity income, emerging markets and fixed interest – Schroder’s stable of funds outperformed those from other industry heavyweights including M&G
and Invesco Perpetual
Funds were selected according to the number of crowns they had under the FE Crown Fund Rating and whether they were headed up by an FE Alpha Manager. They also had to have at least a five year track record to be considered.
The five top-rated funds from each sector were then placed them into a portfolio with an equal weighting to each.
Schroders came out on top over both three and five year periods with returns of 40.08 per cent and 40.3 per cent respectively. The house outperformed the others by a considerable margin, particularly over five years, where the nearest rival – M&G – returned 21.59 per cent.
Performance of portfolios over 5yrs
Source: FE Analytics
The portfolio was made up of a number of highly successful funds including the five crown-rated Schroder Asian Income
portfolio, as well as Schroder International Bond
and Schroder US Mid Cap
, which both have four crowns.
The Schroder funds are not only dominant on an absolute basis but also on a relative basis. The three portfolios mentioned above are top-decile in their respective sectors over five years, and the two remaining funds – Schroder UK Equity
and Schroder Global Equity Income
– have outperformed their sectors.
“We offer a strong range of funds across three key areas: UK equities, income and bonds,” said James Rainbow, head of UK marketing at Schroders. “With this in mind it is not surprising that some of our top performing funds over a three and five year period fall into these asset classes. We believe that our success is down to our group strategy of ensuring that our fund range has something to offer investors in all market conditions.”
He added: “Our overall investment performance remains very strong and ahead of our target with 67 per cent outperformance over three years.”
M&G took the silver medal over five years largely thanks to the contribution of four FE Alpha Managers in the fantasy portfolio – more than any other house in the study.
The portfolio comprised of Tom Dobell’s M&G Recovery
fund, Richard Woolnough’s M&G Optimal Income
fund, Stuart Rhodes’ M&G Global Dividend
fund and Graham French’s M&G Global Basics
fund. M&G Asian
completes the group of five.
The house’s dominance in the most sought after investment sectors has seen it top the best-sellers lists over the last year.
FE data shows that the five funds have received combined inflows of nearly £5.5bn over the last 12 months.
Performance of portfolios
Source: FE Analytics
|| 1yr (%)
|| 3yrs (%)
|| 5yrs (%)
| Invesco Perpetual
Invesco fared well over three years, almost pipping Schroders to the post with a total return of 38.11 per cent.
The five crown rated Invesco Perpetual Latin America
fund accounted for the portfolios emerging market exposure. Our data shows that it is one of the best performing funds in the IMA universe over 10 years with returns of 645.95 per cent. It contributed a return of 36.61 per cent to the group’s three year number.
FE Alpha Manager Neil Woodford’s Invesco Perpetual High Income
fund contributed significantly to the overall performance of the portfolio. He also has a hand in Invesco Perpetual Monthly Income Plus
, running the equity portion of Paul Causer and Paul Read’s fund.
Completing the portfolio were Invesco Perpetual Global Opportunities
and Invesco Perpetual UK Growth