Stock pickers’ ability to add value to a portfolio’s performance has been heavily eroded by sentiment-driven shifts in share prices affecting entire sectors, taking little account of the individual companies within them.
With this in mind, FE Trustnet asked a number of industry experts for the names of managers who have proved their ability to call the macro-economic environment correctly.
Richard Woolnough
Tim Cockerill, head of collectives research at Rowan Dartington, thinks that FE Alpha Manager Richard Woolnough is a clear choice for investors who want someone with a logical macro outlook.
"The fixed interest team at M&G, which is headed by Richard Wooolnough, have usually been one of the best at predicting the macro," said Cockerill.
"I am slightly conscious that there is not a house view that permeates through the M&G team, but Woolnough has certainly been very capable at predicting global trends."
Woolnough heads the M&G Strategic Corporate Bond, M&G Corporate Bond and M&G Optimal Income funds.
According to FE Analytics, the £9.6bn M&G Optimal Income portfolio has delivered top-quartile performance over five years and has beaten the IMA Sterling Strategic Bond sector over three.
Woolnough has been in fund management since 2000 and has consistently beaten his peers during this time. Over 10 years, the manager has returned 91.42 per cent compared with 56.17 per cent from his peer group composite.
Performance of manager vs peer group composite over 10-yrs
Source: FE Analytics
Robin McDonald and Marcus Brookes
Chris Wise, investment director at Gemmell Financial Services, likes the Cazenove pair because he says they are two managers that have demonstrated their ability to adjust their portfolios to reflect their macro views.
He said: "I have tended to favour the Cazenove multi-manager team of Robin McDonald and Marcus Brookes as they have consistently outperformed."
"They have a designated fixed equity space in the portfolios, but they can achieve risk-adjusted returns."
"They have to have a third in equities, a third in fixed income and a third in alternative assets. This means they can’t be too aggressive and can look to hold more in cash if they become more bearish on the global economy."
The duo run the Cazenove Multi-Manager Diversity, Cazenove Multi-Manager Global ex UK and Cazenove Multi-Manager UK Growth portfolios.
The £921.2m Cazenove Multi-Manager Diversity fund they control has beaten the IMA Mixed Investment 20%-60% Shares sector over one, three and five years.
Martin Gray
Wise likes Martin Gray’s high-conviction pessimistic approach, even though the FE Alpha Manager has missed out on recent market rallies.
"Gray is very bearish on the macro at the moment."
"If the macro turns as he expects I think he will do very well. What you want to do is hold a range of managers that think different ways, so you can cover yourself whatever happens."
"His long-term track record is very good; however he has been caught out in the short-term by market rallies."
FE Alpha Manager Martin Gray runs a number of funds for CF Miton in the IMA Flexible Investment sector, including the £248.4m CF Miton Strategic Portfolio, which he has headed up since its launch in 1996.
During his career in fund management he has consistently outperformed his peers.
Performance of manager vs peer group composite over 10-yrs
Source: FE Analytics
Over a 10-year period, Gray has returned 130.45 per cent, compared with 97.90 per cent from his competitors.
Richard Buxton
Neil Shillito, director at SG Wealth Management, believes Richard Buxton’s ability to break down complex macro-economic data and trends makes him one of the best global commentators.
"I like Richard’s take on matters: his views tend to be based on common sense."
"In terms of European issues, he simplifies it well so that others can understand his view and think, 'how can it work?'"
"He is good at dissecting very complex issues into simple concepts."
According to FE Analytics, Buxton has beaten his peer group composite over one, three, five and 10 years. The manager has a particularly good record over five years, having recovered well from the financial crash in 2008.
Buxton heads the Schroder UK Alpha Plus fund, which boasts top-quartile performance in the IMA UK All Companies sector over three, five and 10 years.
Stewart Cowley
Shillito thinks that FE Alpha Manager Stewart Cowley is another manager who is very good at reading the macro issues and adjusting his portfolio accordingly.
"Cowley is a superb fixed income manager," said Shillito. "He has a very in-depth view on global capital markets and also has great knowledge about political situations."
The FE Alpha Manager runs the Old Mutual Global Strategic Bond, Old Mutual Global Bond and Old Mutual Select Managed funds.
He has headed up Old Mutual Global Strategic Bond since 2009, in which time the fund has beaten the IMA Global Bonds sector. He previously ran funds at Newton BNY Mellon Asset Management.
Performance of manager vs peer group composite over 10-yrs
Source: FE Analytics
Over 10 years, the manager has delivered 130.47 per cent according to data from FE, while his peer group composite index has returned 75.41 per cent.