Here are five top-performing portfolios – all with five FE crowns to their name – that investors can only gain exposure to directly.
Sarasin Alpha CIF Income & Reserve
The £41.4m Sarasin Alpha CIF Income & Reserve portfolio is a multi-asset fund that invests in a mixture of bonds, global equities and convertible bonds. It sits in the IMA Unclassified sector.
It currently has around 21 per cent in equities, with the remainder in government bonds, corporate bonds, alternative investments and a small percentage in cash.
Since its launch in August 2005, it has returned 35.86 per cent, beating the average fund in all three Mixed Investment sectors and doing so while taking on less volatility. It has also outperformed over one-, three- and five-year periods, again while taking on less risk.
Performance of fund vs sectors since launch
Source: FE Analytics
Six of the fund’s top-10 holdings are currently gilt options, while its biggest equity positions include Novartis, HSBC and IMI.
As its name suggests, the portfolio also aims to provide a competitive earnings stream. At present, it has a one-year historic yield of 4.47 per cent, which is well above average for a multi-asset fund.
According to FE data, only 11 portfolios in the three mixed-asset sectors are currently paying out more.
The fund has a minimum investment of £1,000 and a total expense ratio (TER) of 1.12 per cent. Mark Whitehead has headed up the portfolio since launch, while David Vickers joined the team in March 2009.
McInroy & Wood Emerging Markets
With the Aberdeen Emerging Markets fund joining First State Asia Pacific and First State Global Emerging Markets on the soft-closed list, investors will have to look further afield for exposure to developing regions.
One option is the McInroy & Wood Emerging Markets fund, which is headed up by Francis Seymour, David Shaw Stewart and Guido Bicocchi.
Performance of fund vs sector since launch
Source: FE Analytics
Since its launch in March 2007, the £38m portfolio has returned 75.76 per cent – a figure that has only been beaten by four emerging market funds, all under the management of either First State or Aberdeen.
The average fund in the sector has returned 37.33 per cent over this period, with more volatility.
McInroy & Wood Emerging Markets also has a strong record in the shorter term, delivering 57.42 per cent over three years compared with its sector’s 30.85 per cent.
Like McInroy & Wood’s global portfolio, the fund has more of an emphasis on smaller companies compared with its peer group.
Universal Robina, a food brand company in the Philippines, and Localiza Rent A Car, a Brazilian car-hire firm, are two of the managers’ biggest holdings.
Unlike the majority of emerging market funds, it aims for income as well as growth and currently has a one-year historic yield of 2.3 per cent.
With a minimum investment of £10,000, the portfolio may be out of reach for the everyday investor. It has a TER of 1.68 per cent.
IM Matterley Equity
Chris Evans and Chris Harris’ £8.4m fund may not have the reputation of many of its rivals in the UK All Companies sector, but few can compete with it in the risk/return standings.
According to FE data, it has returned 47.36 per cent since its launch in March 2006, significantly outperforming its sector average and FTSE All Share benchmark, with less volatility.
The fund also has a superior record over one, three and five years.
Performance of fund vs sector and index
| 1-yr returns (%) | 3-yr returns (%) | 5-yr returns (%) | |
| IM Matterley Equity | 3.79 | 61.33 | 24.51 |
| FTSE 350 Index | -1.59 | 42.55 | -1.31 |
| IMA UK All Comapanies | -4.94 | 37.69 | -6.31 |
Source: FE Analytics
Over five years, only six UK All Companies funds have a higher Sharpe ratio than IM Matterley Equity.
The Sharpe ratio determines which investments have the best risk-adjusted performance by measuring a fund's return relative to a notional risk-free investment – in this case, cash. The difference in returns is then divided by the fund's volatility.
The fund is also among the 15 funds with the highest Sharpe ratio over three and five years.
IM Matterley Equity invests across the FTSE 350 index, with significant positions in FTSE 100 giants such as British American Tobacco and BHP Billiton, as well as mid cap companies such as Renishaw, which sits in its top-10 holdings.
It has a minimum investment of £1,000 and a TER of 1.6 per cent.
MFM Techinvest Technology
Many investors remain haunted by the losses endured during the dotcom bubble, though in recent months a growing number of portfolio managers have increased their weighting to the tech sector.
For those who are ready to re-enter the market, MFM Techinvest Technology is an option.
The £19.1m fund, which is headed up by Conor Macarthy, has returned 113.76 per cent since it was launched in May 2003 – marginally more than its IMA Technology & Telecoms sector average.
Its five-year numbers aren’t as impressive, thanks partly to a poor showing in the 2008 downturn; however, in the last three years the fund is the best performer in its sector, with returns of 83.89 per cent.
The fund invests exclusively in the US and UK tech markets, which currently have a 57/43 per cent split.
Macarthy holds blue chip companies such as Apple, but is predominantly invested in mid caps.
The fund has a minimum investment of £1,000 and a TER of 1.71 per cent.
IM Matterley Regular High Income
This is Chris Evans and Chris Harris’ second appearance, this time with a mixed-asset fund that invests exclusively in government and corporate bonds, as well as high-yielding equities.
The fund sits in the Mixed Investment 0-35% Shares sector and currently has 31 per cent invested in equities.
Like the IM Matterley Equity portfolio, the fund has beaten its peer group consistently since launch and while taking on less volatility. According to FE data, it has returned 26.38 per cent since May 2006 – around twice as much as its sector average.
Performance of funds versus sector since launch
Source: FE Analytics
The fund has an annualised volatility of 3.68 per cent over this period, compared with 5.33 per cent from the average fund in its sector.
With a one year historic yield of 4.38 per cent, it is also the highest-yielding portfolio in IMA Mixed Investment 0-35% Shares.
The portfolio has a minimum investment of £1,000 and TER of 1.1 per cent.