Among the mixed-asset funds that have made the FE Select 100 Short List are the £3.8bn Jupiter Merlin Income, Graham French’s M&G Managed Growth and Fidelity Moneybuilder Balanced, following rigorous analysis by the FE Research (FER) team, headed up by Rob Gleeson (pictured).
The FER Select 100 is a catalogue of top-rated funds based on quantitative analysis alone, meaning it is completely free of emotional interference and bias. Jupiter Merlin Income
Gleeson says the £3.7bn Jupiter Merlin Income fund is an attractive investment due to the stability of the management team, with FE Alpha Managers John Chatfeild-Roberts, Peter Lawery and Algy Smith-Maxwell running the fund for more than 10 years.
"The Jupiter Merlin fund range is one that cannot be ignored in the mixed investment sectors," Gleeson commented. "The Income portfolio is one of the least volatile proposed by the multi-manager house and is an all-in-one investment solution for investors."
Performance of fund vs sector over 10-yrs
| Name | 1-yr returns (%) | 3-yr returns (%) | 5-yr returns (%) | 10-yr returns (%) |
| Jupiter - Merlin Income | 13.76 | 25.95 | 27.64 | 120.94 |
| IMA Mixed Investment 20-60% Shares | 10.03 | 16.38 | 9.91 | 70.97 |
Source: FE Analytics
According to FE data, the fund has significantly outperformed its IMA Mixed Investment sector average over one-, three-, five- and 10-year periods, and has beaten it in 10 of the last 10 calendar years. Unsurprisingly, it has five FE crowns.
Jupiter Merlin Income is a multi-manager portfolio. Top holdings include five crown-rated funds such as Invesco Perpetual Income, Newton Asian Income and Jupiter Strategic Bond. It has a yield of 2.9 per cent.
M&G Managed Growth
Gleeson says the £1.3bn M&G Managed Growth fund is relatively disappointing during falling markets due to its exposure to commodity-related companies.
However, it tends to bounce back sharply, which is why it made the shortlist.
Gleeson says the three crown-rated fund is primarily invested in other M&G products and benefits from the management style of FE Alpha Manager Graham French, who is a good bet during rising markets.
Performance of fund vs sector over 10-yrs
Source: FE Analytics
The fund has also outperformed its peer group over three, five and 10 years, delivering more than twice the returns of the IMA Flexible Investment sector over the 10-year period.
M&G Managed Growth currently has one-third of its assets invested in the M&G Global Basics fund, which is also managed by French. Other notable holdings include M&G Recovery and M&G Global Growth.
The fund can also hold individual equities, and includes G4S and Symrise in its top-10 holdings.
Fidelity Moneybuilder Balanced
Diversification is not always the solution for reduced volatility and consistent returns. Gleeson says the £268m Fidelity Moneybuilder Balanced fund is different from the other two recommended portfolios in that it invests primarily in equities and bonds rather than spreading its holdings across a wide range of asset classes.
However, he points out the five crown-rated fund benefits from the knowledge of fixed income specialist Ian Spreadbury and equity expert Michael Clark, who are both FE Alpha Managers.
Their fund has a strong track record, outperforming the IMA Mixed Investment 40-85% Shares sector over one, three, five and 10 years. The fund’s annualised volatility is also lower than its sector average over 10 years.
Performance of fund vs sector over 10-yrs
Source: FE Analytics
The fund’s top holdings include blue chip names such as GlaxoSmithKline and British American Tobacco, as well as three gilt securities, which have a combined weighting of 15 per cent.
Spreadbury has run the portfolio since 1995. Clark joined him in December 2009.
The fund has a yield of 4.15 per cent and a minimum investment of £500. It has a total expense ratio (TER) of 1.21 per cent, making it the least expensive of the three funds.
In comparison, the Jupiter Merlin Income fund has a minimum investment of £500 and a TER of 2.33 per cent, while M&G’s Managed Growth fund sits in the middle with a minimum investment of £500 and a TER of 1.68 per cent.
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