‘Cautious’ multi-asset funds such as Premier Multi-Asset Distribution, MI Hawksmoor Vanbrugh and Architas MA Active Intermediate Income have consistently ranked in the top 10 per cent of their peers on a wide variety of performance metrics over recent years, according to the latest FE Trustnet research.

As part of this series, we have been looking at the average decile rankings of funds when it comes to cumulative five-year returns to the end of 2016, those for the three most recent individual calendar years, annualised volatility, maximum drawdown, alpha generation, Sharpe ratio, downside capture and upside capture.

In this article, we look at the funds in the IA Mixed Investment 20-60% Shares sector – which was formerly known as the ‘Cautious’ sector – and use the FTSE UK Private Investor Income index for comparison purposes.

Performance of sector vs index over 5yrs to 31 Dec 2016

Source: FE Analytics

When this sector was examined a year ago, Premier Multi-Asset Distribution was the highest ranked fund followed by Premier Multi-Asset Monthly Income, HL Multi Manager Equity & Bond, Kames Ethical Cautious Managed and Aviva Investors Distribution.

However, there have been some changes in the ranking over the past year and in this article we look at the five IA Mixed Investment 20-60% Shares funds with the lowest average decile ranking for the 10 metrics, as well as revealing the top 25 on the final page.

Architas MA Active Intermediate Income

Source: FE Analytics

In fifth place in this study, thanks to an average decile ranking of 3 and a 55.61 per cent five-year return, is Architas MA Active Intermediate Income. It has been managed by Nathan Sweeney since January 2015 with Jaime Arguello joining him in February 2017; prior to this it was run by Stephanie Carbonneil. The £327.6m fund sits in the IA Mixed Investment 20-60% Shares sector’s top decile for Sharpe ratio and the second decile for five-year total returns and upside capture. The fund, which holds four FE Crowns, has a multi-manager approach and counts JPMorgan US Equity, Fidelity MoneyBuilder Dividend and BlackRock GF Asia Pacific Equity as its biggest holdings. Architas MA Active Intermediate Income has a 1.33 per cent ongoing charges figure (OCF) and is yielding 2.86 per cent.

MI Hawksmoor Vanbrugh

Source: FE Analytics

MI Hawksmoor Vanbrugh, which is headed up by FE Alpha Manager Richard Scott, Daniel Lockyer and Ben Conway, has an average decile ranking of 2.9. It made 54.84 per cent over the five years covered in this research and is in the sector’s top decile for alpha generation, maximum drawdown, Sharpe ratio and downside capture. The £112.6m fund has an FE Crown Rating of four and takes a contrarian approach that also attempts to build in a ‘margin of safety’. This is another multi-manager portfolio; it puts an emphasis on finding active managers with the likes of Jupiter Absolute Return, Henderson UK Absolute Return and Old Mutual Global Equity Absolute Return being among its top holdings. MI Hawksmoor Vanbrugh has a 1.86 per cent OCF and yields 1.59 per cent.

Royal London Sustainable Diversified Trust

Source: FE Analytics

FE Alpha Manager Mike Fox’s Royal London Sustainable Diversified Trust sits in third place with a 2.7 average decile ranking. The £424.7m fund’s 65.4 per cent five-year return puts it in the IA Mixed Investment 20-60% Shares sector’s top decile; it’s also among the top 10 per cent of its peer group for Sharpe ratio and upside capture – although its annualised volatility is in the eighth decile. The FE Invest team, which has the fund on its Approved List, said: “The Royal London Sustainable Diversified Trust is a straightforward mixed-investment fund with a preference for developed equities, where the ethical approach is central to the investment process and adds value to the product, helping it to generate an impressive track record over time.” The five FE Crown-rated fund has a 0.77 per cent OCF and is yielding 1.91 per cent.

Premier Multi-Asset Monthly Income

Source: FE Analytics

In second place with a 2.2 average decile ranking is Premier Multi-Asset Monthly Income, which is managed by David Hambidge, Simon Evan-Cook, Ian Rees and David Thornton. The fund is top decile for five-year total returns, alpha generation, maximum drawdown, Sharpe ratio and downside capture. Like all the multi-multi-manager funds managed by Premier’s multi-asset team, it has a contrarian approach and keeps a very close eye on valuations. Top holdings include Franklin UK Equity Income, Fidelity Enhanced Income and Polar Capital European (ex UK) Income. Premier Multi-Asset Monthly Income has an OCF of 1.40 per cent and yields 4.54 per cent.

Premier Multi-Asset Distribution

Source: FE Analytics

Coming in first place with a 2.1 average decile ranking and holding onto the top spot is the four FE Crown-rated Premier Multi-Asset Distribution, which is also managed by Hambidge, Evan-Cook, Rees and Thornton. This £1.2bn fund is in the IA Mixed Investment 20-60% Shares sector’s top decile for five-year returns, alpha generation, maximum drawdown, Sharpe ratio and downside capture. The funds managed by Premier’s multi-asset team have performed strongly in this series of studies – not only do they have two entrants in this study, but Premier Multi-Asset Global Growth was in second place in the flexible sector while Premier Multi-Asset Growth & Income was in first place in the IA Mixed Investment 40-85% Shares sector. Premier Multi-Asset Distribution has a 1.31 per cent OCF and is yielding 4.16 per cent.

Source: FE Analytics