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Five cautious funds topping the tables for advisers’ second favourite metric

14 April 2017

In the next gallery of an ongoing series, FE Trustnet finds the IA Mixed Investment 20%-60% Shares funds with the highest average rolling five-year returns.

By Gary Jackson,

Editor, FE Trustnet

CF Ruffer Total Return, Jupiter Merlin Income Portfolio and Invesco Perpetual Distribution are IA Mixed Investment 20%-60% Shares funds that have made some of the highest average five-year returns since the turn of 2000, research by FE Trustnet shows.

Investment research and advisory business Platforum recently found that average five-year rolling returns are the second most used metric when financial advisers are researching funds, behind performance relative to the sector and ahead of the most recent three-year return.

How advisers independently review fund performance

 

Source: FE Analytics

As part of an ongoing series, FE Trustnet has been applying this metric to various peer groups and it is now the turn of the IA Mixed Investment 20%-60% Shares sector.

To do this we took the rolling five-year total returns over the 50 quarterly periods spanning 1 January 2000 to 31 March 2017 and worked out the average return. We also found out the highest and lowest returns during this period.

In the following gallery, we highlight the five IA Mixed Investment 20%-60% Shares funds with highest average rolling five-year gains (of the funds that have been around for at least 25 of the 50 periods) as well as revealing the top 25, according to this metric.


Jupiter Merlin Income Portfolio

5yr rolling return vs sector

 

Source: FE Analytics

In fifth place we have the £3.1bn Jupiter Merlin Income Portfolio, which is headed up by John Chatfeild-Roberts, Algy Smith-Maxwell (both of whom are FE Alpha Managers), Amanda Sillars and David Lewis. It has a track record spanning all 50 periods and its average rolling five-year total return has been 40.97 per cent. This fund of funds offering is one of the most popular in the sector and has the likes of CF Woodford Equity Income, Invesco Perpetual UK Strategic Income, Fundsmith Equity and Jupiter Strategic Bond as holdings. The managers’ process starts with an analysis of the macroeconomic environment before seeking out the funds best placed to capitalise on this. Since 1 January 2000, Jupiter Merlin Income Portfolio’s highest five-year return was 72.06 per cent while the lowest was 20.47 per cent.

Cumulative return to 31 Dec 2016 vs sector

 

Source: FE Analytics


Standard Life Investments Dynamic Distribution

5yr rolling return vs sector

 

Source: FE Analytics

Jacqueline Lowe and Iain McLeod manage the £345.7m Standard Life Investments Dynamic Distribution fund. With 25 periods of track record to examine, the fund has posted an average five-year total return of 42.38 per cent; the highest stands at 99.10 per cent but the lowest was a 2.67 per cent loss. This is another fund of funds product, but as a fettered mandate it only invests into portfolios managed by Standard Life Investments. It largest holding is Standard Life Investments UK Equity High Income, followed by Standard Life Investments UK Equity Income Unconstrained, Standard Life Investments Higher Income and Standard Life Investments Corporate Bond.

Cumulative return to 31 Dec 2016 vs sector

 

Source: FE Analytics


Invesco Perpetual Distribution

5yr rolling return vs sector

 

Source: FE Analytics

This is another of the sector’s best-known funds. The £3bn Invesco Perpetual Distribution fund, which is managed by Paul Causer, Paul Read and Ciaran Mallon, has made an average five-year total return of 43.19 per cent over 33 periods of track record. During this time, its highest five-year return was 112.21 per cent and the lowest was 3.56 per cent. Causer and Read, co-heads of fixed income at Invesco Perpetual, oversee the portfolio’s fixed income allocation. They have a strong reputation as bond investors and have maintained a defensive position for some time. Mallon looks after its equities allocation and took over from Neil Woodford in 2013.

Cumulative return to 31 Dec 2016 vs sector

 

Source: FE Analytics


CF Ruffer Total Return

5yr rolling return vs sector

 

Source: FE Analytics

In second place is the £3.1bn CF Ruffer Total Return fund, which is run by FE Alpha Managers David Balance and Steve Russell. This fund has 47 periods of track record for us to look at and has made an average five-year return of 54.19 per cent across them. The largest was 102.48 per cent; the smallest 19.95 per cent. Ballance and Russell prioritise capital preservation and their process seeks to identify assets that benefit from the impact of fear and greed in global markets. The portfolio’s largest allocation at the moment is to non-UK index-linked bonds at 17 per cent, followed by Japanese equities, long-dated index-linked gilts and UK equities.

Cumulative return to 31 Dec 2016 vs sector

 

Source: FE Analytics


CF Miton Cautious Multi Asset

5yr rolling return vs sector

 

Source: FE Analytics

In first place with an average five-year return of 54.66 per cent over all 50 periods is CF Miton Cautious Multi Asset. This £398.8m fund is now managed by David Jane and Anthony Rayner, with Martin Gray and James Sullivan being at the helm prior to 2014. This is another portfolio run with a clear focus on capital preservation. It was previously a fund of funds product but now focuses on direct securities, with gold, Royal Dutch Shell and BP being its biggest individual holdings. That said, corporate bonds are the portfolio’s largest weighting when looked at on an asset class basis. Its largest five-year gain over the period in question was 154.65 per cent and the lowest was 12.96 per cent.

Cumulative return to 31 Dec 2016 vs sector

 

Source: FE Analytics


 

Source: FE Analytics

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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.