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The value managers that have just won an FE Alpha Manager rating

FE Trustnet finds out which managers with a value style of investing have been awarded FE Alpha Manager status in the latest rebalancing.

Gary Jackson

By Gary Jackson, Editor, FE Trustnet
Tuesday February 14, 2017

Hermes Asia ex Japan Equity, Schroder Recovery and Invesco Perpetual UK Growth are some of the funds that have exposure to the value investing style and are headed up by recently-crowned FE Alpha Managers.

The FE Alpha Manager ratings recently went through their annual rebalancing, with 193 managers being awarded the title. Of these, 56 were not FE Alpha Managers over the previous year.

At the same time, the debate continues over whether the value investing style – which rallied hard in 2016 after several years of underperformance – will continue to lead the market.

With this in mind, FE Trustnet highlights several new FE Alpha Managers who have a value tilt in their portfolios – ranked in order of returns over the past five years.



 

Jonathan Pines – Hermes

Performance of manager vs peer group composite since Nov 2012

 

Source: FE Analytics

First up is Jonathan Pines, who runs the Hermes Asia ex Japan Equity fund. As the $2.3bn retail-facing portfolio was launched in November 2012, it is yet to achieve a five-year track record but since inception it has more than doubled the total return of its average IA Asia Pacific ex Japan peer. Square Mile, which gives the fund a ‘A’ rating, says Pines “could be viewed as an opportunistic investor, looking to invest where there is a valuation discrepancy”. The manager will look at companies of any quality when building his portfolio, but lower-quality stocks need to be trading on very cheap valuations to be bought. Given the nature of his approach Pines is a bottom-up stock picker and current holdings within Hermes Asia ex Japan Equity include Baidu, Samsung Electronics and Cosco Shipping.

 

Source: FE Analytics

 


 

Carl Stick – Rathbones

Performance of manager vs peer group composite over 5yrs

 

Source: FE Analytics

Carl Stick has been manager of the five FE Crown-rated Rathbone Income fund since the start of 2000 and has built up a strong track record over this time. The portfolio is managed with a cautious approach that is centred around not losing money; stocks are assessed on their price risk, business risk and financial risk. Stick’s approach means that he prefers companies with a slightly higher price but analysis of his past holdings shows the portfolio is more tilted towards value than growth stocks; however, it is not an out-and-out value fund. Current holdings include Royal Dutch Shell, Rio Tinto and HSBC Holdings. Stick looks for dividend growth rather than a high starting yield when investing, which means the fund was moved from the IA UK Equity Income sector to the IA UK All Companies peer group last year. The £1.4bn fund is a member of the FE Invest Approved List.

 

Source: FE Analytics


 

Martin Walker – Invesco Perpetual

Performance of manager vs peer group composite over 5yrs

 

Source: FE Analytics

Martin Walker runs a number of offerings for Invesco Perpetual but is perhaps best known for managing the £1.2bn Invesco Perpetual UK Growth fund, which he has headed up since June 2008. This fund, which despite its name has value-based approach, has made an 86.39 per cent total return over the past five years and sits in the top quartile of the IA UK All Companies sector. FE Invest, which has the fund on its Approved List, said: “The manager is currently positioned for an economic recovery, believing that the market is underestimating the chance of a strong recovery and that this would boost the cyclical sectors such as banks and miners which he is buying.” Reflecting this, top holdings include Barclays and Royal Bank of Scotland.

 

Source: FE Analytics


 

Nick Kirrage & Kevin Murphy – Schroders

Performance of managers vs peer group composite over 5yrs

 

Source: FE Analytics

Nick Kirrage and Kevin Murphy work on Schroders’ value equity desk and co-manage a number of portfolios, including the £916.5m Schroder Recovery fund. They have run this fund for more than a decade, producing a top-decile return of 178.16 per cent over this time. The duo are resolutely value investors in their approach and this means that their funds can undergo short-term periods of underperformance. Schroder Recovery, for example, was the worst performing IA UK All Companies fund in 2015 after losing 12.74 per cent but was the sector’s second best performer in 2016 with a 31.11 per cent gain. The focus on value is clear from its three biggest holdings: HSBC, Royal Bank of Scotland and Barclays.

 

Source: FE Analytics


 

Stephen Anness – Invesco Perpetual

Performance of manager vs peer group composite over 5yrs

 

Source: FE Analytics

Stephen Anness manages the £218.1m Invesco Perpetual Global Opportunities fund, which is outperforming its average IA Global peer over one, three and since Anness took over in January 2013. The portfolio is built around companies showing good growth prospects but which the manager considers to be undervalued. Anness believes the global economy is recovering and is seeking opportunities in cyclical areas of the market. However, he ensures that his holdings are not all driven by the same themes, in order to limit the risk that they will all suffer at the same time. Invesco Perpetual Global Opportunities currently holds Bayer, JP Morgan Chase and Citigroup as its largest positions.

 

Source: FE Analytics


This article is for professional investors only. You will be redirected to the News & Research homepage in seconds. If you are having problems getting to the page, please click here
Data provided by FE. Care has been taken to ensure that the information is correct, but FE 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.

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