Five funds in the IMA Flexible Investment sector managed to outperform in every calendar year between 2007 and 2011, while three achieved the accolade in both the Mixed Asset 20-60% and 40-85% sectors.
Year-on-year performance of funds from 2007 to 2011
| Name |
2011 returns (%) |
2010 returns (%) | 2009 returns (%) |
2008 returns (%) | 2007 returns (%) |
| Scot Mut - Cautious |
5.6 |
9.87 |
16.23 |
-11.2 |
2.33 |
| Jupiter - Merlin Income Portfolio |
-0.63 |
12.46 |
17.42 |
-10.84 |
2.77 |
| HSBC - Open Global Distribution |
-0.78 |
8.65 |
18.44 |
-13.12 |
2.58 |
| IMA Mixed Investment 20%-60% Shrs |
-1.89 |
8.56 |
15.9 |
-15.84 |
1.39 |
| AXA - Framlington Managed Balanced |
-3.64 |
16.93 |
21.09 |
-21.08 |
5.89 |
| Pru - Managed Tracker |
-4.18 |
12.47 |
21.05 |
-19.52 |
5.98 |
| Baillie Gifford - Managed |
-5.06 |
18.58 |
22.12 |
-19.1 |
8.26 |
| IMA Mixed Investment 40%-85% Shrs |
-5.53 |
12.29 |
20.12 |
-21.47 |
4.35 |
| Newton - Notts Trust |
-4.57 |
15.02 |
27.03 |
-24.9 |
14.57 |
| Newton - Norfolk Trust |
-5.32 |
15.74 |
24.95 |
-23.15 |
14.76 |
| Threadneedle - Navigator Growth |
-6.01 |
14.62 |
24.69 |
-18.43 |
10.55 |
| Threadneedle - Global Equity |
-7.66 |
18.21 |
24.61 |
-25.05 |
13 |
| Stan Life Inv - Managed Ret |
-8.25 |
15.26 |
26.12 |
-24.79 |
8.5 |
| IMA Flexible Investment |
-8.85 |
14.57 |
24.03 |
-26.11 |
6.78 |
Source: FE Analytics
Jupiter Merlin Income Portfolio – the largest and highest-profile of the funds featured in the study – has the best record overall, with returns of 20.89 per cent over a five-year period. The average vehicle in its Mixed Asset 20-60% sector has returned only 5.66 per cent during this time.
The vehicle boasts a more consistent record than any fund featured in the series to date, outperforming its sector average in each of the last 12 calendar years. One has to go back to 1999 when John Chatfeild-Roberts, Peter Lawery and Algy Smith-Maxwell – all FE Alpha Managers – last underperformed their peer group. According to FE Analytics data, it has amassed returns of 89.88 per cent in the last decade, outperforming its sector average and FTSE APCIMS Income benchmark by 50.14 and 25.66 per cent respectively. This stellar performance has come despite a total expense ratio (TER) of 2.33 per cent, which is high even for a multi-manager fund.
Performance of fund since launch vs sector and benchmark
Source: FE Analytics
With a one-year historic yield of 3 per cent, it is also yielding significantly more than the average fund in its sector. A recent FE Trustnet article revealed the vehicle was the second best-selling fund on the Cofunds platform in December 2011.
The Scottish Mutual Cautious fund is also well worth its place in the study, boasting a particularly strong record in downwards-moving markets. In a turbulent 2011, the fund returned 5.6 per cent, compared with losses of 1.89 per cent from its sector average.
Given the flexibility of the fund’s sector definition, manager John Kelly has moved his portfolio aggressively into low-risk assets. Our data shows that more than 70 per cent of the fund is invested in the fixed interest market.
The £507m Baillie Gifford Managed fund is the stand-out performer in the Mixed Asset 20-60% sector, boasting the best record of its closest rivals in every year apart from 2011. There’s little to choose between the five most consistent performers in IMA Flexible Investment, though Threadneedle Navigator Growth has the best cumulative returns over the period, and it performed significantly better than its peers during the global financial crisis.
With the exception of the two Newton funds and Scottish Mutual Cautious, all of the vehicles featured in the study are suitable for retail investors, with a minimum investment of either £500, £1,000 or £2,000.
In the sixth instalment, FE Trustnet will examine the most consistent funds in the fixed interest sectors. The fourth study in the series found that no emerging market fund beat its sector average in each of the last five calendar years.