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The balanced funds that ticked (just about) all the boxes over the past three years

28 March 2023

It’s the turn of the IA Mixed Investment 40-85% Shares sector to go under our microscope looking at performance across 10 different risk and return metrics.

By Gary Jackson,

Head of editorial, FE fundinfo

Balanced multi-asset funds are often the mainstay of a portfolio thanks to their exposure to a range of assets but the approach has struggled in recent years. However, Trustnet research shows some popular balanced funds have consistently made better-than-average returns over the past three years.

This ongoing series looks for funds that have beaten their peers on all fronts over the past three years, ranking them on cumulative total returns, volatility, alpha, Sharpe ratio, maximum drawdown, upside capture and downside capture over the past three years, as well as returns in each of 2022, 2021 and 2020.

Trustnet works out an average percentile score for each fund across the 10 metrics and the lower the average percentile, the better the fund has performed overall. Given the diverse range of benchmarks used by IA Mixed Investment 40-85% Shares funds, we’ve taken the sector average as the benchmark for this research.

Over the three years in question, the average IA Mixed Investment 40-85% Shares fund has made a 5.1% total return, with annualised volatility of 12% and a 15.4% maximum drawdown. But some members of the peer group have performed much stronger than this average and the best overall fund, across all 10 metrics we looked at, was Premier Miton Diversified Sustainable Growth.

Performance of Premier Miton Diversified Sustainable Growth over 3yrs to end of 2022


Source: FE Analytics

With assets under management of just £28m, this is one of the smaller funds in the sector but has made significantly more than its average peer over the past three full calendar years, returning 24%, with comparable volatility.

It has outperformed the sector on most of the metrics we looked at, achieving an average percentile score of 12.2. It holds an FE fundinfo Crown Rating of five.

Managed by Neil Birrell, the fund invests in sustainable themes such as health and well-being, financial inclusion and energy transition by holding stocks, bonds, property shares and alternatives.

The table below shows the 10 funds with the best scores in this research; the top row shows the absolute number for the metric in question while the lower row is the percentile rank.


Source: FE Analytics

The fund in second place in this research might be a more familiar name: the £2.4bn BNY Mellon Multi-Asset Balanced fund. It has an average percentile score of 14.5 and has made a total return of 19.7% in the three years examined here.

It is run by Newton’s Simon Nichols, Bhavin Shah and Paul Flood, who manage the portfolio with a global thematic approach that revolves around identifying long-term structural changes such as demographic shifts and the growing demand for healthcare then finding investment opportunities linked to them.

Analysts at Square Mile, which gives the fund an ‘A’ rating, said the simplicity of the fund's structure and approach is an attractive feature. “The managers will invest directly into a portfolio of global equities which they believe will benefit from a range of structural themes and forces for change in the world,” they explained. “They supplement the equity holdings with assets which have historically shown a low correlation to equities and which provide a natural hedge, namely government bonds and cash.”

The £1.9bn Jupiter Merlin Balanced Portfolio is another familiar name and is run by John Chatfeild-Roberts, Amanda Sillars, David Lewis and George Fox. It has an average percentile score of 23.3.

The approach taken by the Merlin multi-manager team favours active management, as it believes the key to success is investing the right people at the right time. The team is well-established and noted by analysts for its experience across a range of market and economic conditions.

The IA Mixed Investment 40-85% Shares sector’s biggest funds fall further down the rankings, however.

Vanguard LifeStrategy 60% Equity, the largest member of the peer group with assets of £13.7bn, is ranked 67th out of 185 funds in this research while the £8.6bn Vanguard LifeStrategy 80% Equity fund is 28th. Stablemate fund Vanguard SustainableLife 60-70% Equity, on the other hand, is found in the top 10.

Baillie Gifford Managed is ranked 146th with an average percentile score of 65.6 while Royal London Sustainable World Trust and Liontrust Sustainable Future Managed placed 54th and 97th respectively.


Source: FE Analytics

Of course, not every fund can outperform so the table above shows the 10 funds with the highest average percentile score after sitting towards the bottom of the IA Mixed Investment 40-85% Shares sector on most of the 10 metrics.

Fortunately, most of these funds are among the smallest of the peer group, meaning few investors will be holding them. EF 8AM Growth – which came out bottom in this research with an average percentile score of 96 – is just £1.6m in size, for example, while the largest is the £338m Premier Miton Multi-Asset Growth & Income fund.

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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.