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Three global managers making a storming start to life in their new funds

15 June 2017

FE Trustnet looks at three managers in the IA Global Sector who have made top quartile returns in funds they took over between three and five years ago.

By Jonathan Jones,

Reporter, FE Trustnet

Fund manager changes can occur for a number of reasons, be it former managers leaving or retiring, mergers of funds or promotions from within and the first few years of a manager’s tenure on a new fund are critical.

While they need time to put their stamp on the fund, and should really be judged on their performance over a full market cycle, investors tend to be more short term in their thinking and therefore a strong start to life in a new fund is important.

Having previously looked at the funds in the IA UK All Companies sector, FE Trustnet has picked out three managers from the IA Global sector who have made a strong start with their new mandates.

Below FE Trustnet takes a closer look at how the managers have performed over three, four or five years since taking over their new funds.

 

Fidelity Global Special Situations

The first fund manager we looked at is FE Alpha Manager Jeremy Podger, who took over the £2.2bn Fidelity Global Special Situations fund on 1 March 2012.

The Global Special Situations fund was formed in 2006 when the firm split Anthony Bolton’s £6bn Fidelity Special Situations fund – one of the most popular portfolios in the UK at the time.

Fidelity divided the fund into the UK Special Situations, run by Bolton, and a Global Special Situations fund run by Jorma Korhonen.

Over his tenure, the fund lost 2.89 per cent while the average peer from the IA Global sector made a 15.16 per cent gain and the MSCI AC World benchmark returned 22.12 per cent.

Performance of fund vs sector and benchmark over Korhonen’s tenure

 

Source: FE Analytics

This placed the fund as the sixth worst performer in the sector out of 127 eligible funds since the fund was launched and saw a change in management.


Podger, who had been head of global equities at Threadneedle, took over in March 2012, and has delivered a significant turnaround in the fortune of the fund.

Since he took over, the fund has been the tenth best performer in the sector, returning 135.59 per cent, beating the sector and benchmark by 53.81 and 38.68 percentage points respectively.

Performance of fund vs sector and benchmark over Podger’s tenure

 

Source: FE Analytics

The fund is slightly underweight the US compared to its benchmark (48.8 per cent versus 52.6 per cent) while overweight Japan, France and the Netherlands.

It uses a modest short book (currently 4 per cent of the fund) and has net long positions of 100.7 per cent.

Alphabet and Apple are among the top 10 holdings and the fund has a 6.1 per cent overweight to technology. It is also overweight energy with Shell in its top 10 holdings, but underweight financials, industrials and consumer staples.

The four crown-rated fund has a clean ongoing charges figure (OCF) of 0.95 per cent.


 

T. Rowe Price Global Focused Growth Equity

Another manager who has made a strong start to life on his new fund is FE Alpha Manager David Eiswert who runs the $311m T. Rowe Price Global Focused Growth Equity fund.

He was named manager in September 2012 following the retirement of Robert Gensler, taking on management responsibility for more than $13bn in global equity assets in total.

Gensler ran the fund from 2005 to 2012 and during his tenure returned 49.12 per cent, 98 basis points behind the sector average and 13.26 percentage points behind the MSCI AC World Index.

Since taking over the fund, Eiswert has produced returns of 143.79 percent making it the fifth best performer over the time frame.

Performance of fund vs sector and benchmark over Eiswert’s tenure

 

Source: FE Analytics

Indeed, it has beaten the sector by 59.95 percentage points and the benchmark by 46.91 percentage points, as the above chart shows.

The four crown-rated fund is currently 12.9 per cent overweight to technology stocks compared to the benchmark, with Apple, Alphabet and Samsung among its top 10 holdings.

It also has an overweight to healthcare owning Shire in its top 10 holdings and consumer discretionary. Geographically, the fund is slightly underweight the US, whilst overweight Japan, the UK and China as well as India.

The fund has an OCF of 0.92 per cent.


 

Henderson Global Care Growth

The final manager who has made a hot start to life on his ‘new’ fund is Nick Anderson who runs the Henderson Global Care Growth.

He became the manager of the fund shortly after he moving to Henderson Global Investors following its acquisition of Gartmore. The entire socially responsible investing team left the business after the reshuffle, with Anderson taking over the fund at the start of 2012.

The Henderson Industries of Future fund Anderson had been managing was merged into the fund along with the Henderson Global Care UK Income fund.

Anderson took over from Tim Dieppe as part of the mergers, who during his tenure from 2004 to 2011 had returned 57.30 per cent.

This was slightly ahead of the sector and almost double the MSCI World’s returns over the period, though it placed the fund in the third quartile.

Since taking over the fund at the start of 2012, Anderson has returned 128.44 per cent, making the fund a top quartile performer over his tenure.

Performance of fund vs sector and benchmark over Anderson’s tenure

 

Source: FE Analytics

The £533m fund, which Anderson has co-managed with Hamish Chamberlayne since December 2013, only invests in companies whose products and practices are considered by the authorised corporate director to enhance the environment and life of the community.

Its top holding is in Adobe Systems, with Microsoft and Visa also among its top 10 holdings and it has a large weighting in the US (57.1 per cent of the portfolio).

The fund, which has a high weighting to technology (27.9 per cent) and industrials (25 per cent), has an OCF of 0.85 per cent.

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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.