Data from FE Analytics shows that over the last five years, all three of the group’s offerings with a long enough track record have been top-quartile for performance and bottom-quartile for volatility.
The standout performer is FE Alpha Manager Francis Brooke’s Trojan Income fund. Over the last five years the £519m fund has returned 36 per cent, more than any other product in IMA UK Equity Income, and with an annual volatility score of 12.4 per cent, it is the second least volatile fund in its sector.
Performance of fund vs sector over 5-yrs
Source: FE Analytics
Brooke’s investment strategy centres on sustainable dividend growth and the manager puts great emphasis on maintaining investors’ capital. Rather than trying to shoot the lights out by investing in companies with the highest yields, Brooke instead picks stocks with a 4 to 5 per cent dividend to maintain a balance between income and growth.
With an annual volatility score of 8.59 per cent over the last five years, fellow FE Alpha Manager Sebastian Lyon’s Troy Trojan fund is the third least-volatile product in the Mixed Investment 40-85% Shares sector, behind only FE Alpha Manager Martin Gray’s CF Miton Strategic Portfolio and CF Miton Special Situations funds.
Troy Trojan has returned 51.04 per cent over the period. Only the CF Ruffer European fund has performed better.
"The fund managers that have done the best over the last few years are all about capital preservation and investors should learn a lot from that philosophy," said Kerry Nelson, managing director at Nexus IFA. "People need managers in their armoury who are appreciative of the dangers out there but also know how to get the best out of the upside. The likes of Francis Brooke and Sebastian Lyon fit the bill on both fronts."
Liontrust also fares well in an analysis of risk/reward. Like Troy, the group runs just a handful of focused equity portfolios.
The Liontrust Special Situations and UK Growth Portfolios are first and third in the UK All Companies sector over the last five years in terms of performance.
In Anthony Cross and Julian Fosh the fund has two FE Alpha Managers at the helm who have kept a keen eye on controlling its risk profile. With an annual volatility score of 15.9 per cent over five years, the fund is comfortably in the bottom quartile.
Liontrust’s £12.3m acquisition of Walker Crips this week will help bolster the range. FE Alpha Managers Jan Luthman and Stephen Bailey are also top performers when measured on performance and risk.