According to FE data, less than 10 per cent of portfolios in the IMA universe do not have an upfront charge and many of these are institutional or tracker funds.
Here are five top-rated investment portfolios that do not currently charge an upfront fee:
Trojan Capital
Like the higher-profile Trojan Income portfolio, Trojan Capital charges no initial fee for anyone investing directly.
With a total expense ratio (TER) of 1.12 per cent, it is also one of the cheapest options in the IMA Global sector.
Gabrielle Boyle’s £82m fund, which has five FE crowns, invests predominantly in developed equity markets.
The UK is its biggest regional position, with a weighting of 37 per cent, followed by the US with 26 per cent and continental Europe with 16 per cent.
Ten per cent is invested in cash, and a further 7.8 per cent is in gold.
The fund is a top-quartile performer over three and five years, with returns of 28.76 and 30.77 per cent respectively. Over both time periods, it has beaten its FTSE All Share benchmark, with less volatility.
Performance of fund vs sector over 5-yrs
Source: FE Analytics
Like all of Troy’s portfolios, it aims to outperform over the long-term, with less volatility than its peers, and tends to fall short of the market during significant upturns.
The fund has a defensive bias, with a significant overweight in healthcare.
It requires a minimum investment of £1,000.
CF Olim UK Equity
Investors may have little choice but to invest directly for this portfolio, since it is listed on very few of the major platforms.
The £9m fund is little known by professional investors, but it has a track record to match the highest-profile portfolios on the market.
According to FE data, it has delivered 27.39 per cent over five years, significantly outperforming its sector and FTSE All Share benchmark.
It has been less volatile than the index over this time and also has a significantly lower max drawdown.
Performance of fund vs sector and index over 5yrs
Source: FE Analytics
CF Olim UK Equity is also a top-quartile performer over one, three and 10 years, as well as over three and six months.
Angela Lascelles has headed up the portfolio since its launch in July 2002, and has since been joined by co-managers Simon Jaffe and Andrew Impey.
They run a multi-cap portfolio, investing in the FTSE 100, FTSE 250, FTSE Small Cap and AIM indices.
Their top-10 includes FTSE 100 favourites such as Glaxo and Vodafone, as well as much smaller companies including Rotork, Informa and Spectris – its biggest holding.
The fund is currently yielding 4.45 per cent, requires a minimum investment of £1,000 and has a TER of 1.5 per cent.
McInroy & Wood Income
On the plus side, this fund does not demand an initial upfront charge, although investors will have to cough up £10,000 for exposure.
According to FE data, McInroy & Wood Income is a top-quartile performer in its IMA Mixed Investment 40-85% Shares sector over one, three, five and 10 years.
Performance of fund and sector over 10-yrs
| Name | 1yr (%) | 3yr (%) | 5yr (%) | 10yr (%) |
|---|---|---|---|---|
| McInroy & Wood - Income | 11.63 | 28.81 | 32.22 | 146.31 |
| IMA Mixed Investment 40%-85% Shrs TR in GB | 8.75 | 17.47 | 10.31 | 86.29 |
Source: FE Analytics
It is currently yielding 3.1 per cent.
FE Alpha Manager Victor Wood runs a mixed-asset portfolio, currently split around 75/25 between equities and bonds. Most of its assets are UK-listed, although it has a sizeable chunk in the US.
It has a TER of 1.55 per cent and has £240m assets under management (AUM).
M&G International Sovereign Bond
This £82m portfolio may not have the reputation of the UK products headed up by Richard Woolnough, but it is still a top performer and has the added advantage of having no initial fee.
Mike Riddell’s fund has beaten its sector average over three, five and 10 years, although it has struggled over the last year. Over five years it is a top-quartile performer with returns of 82.34 per cent.
The fund aims to produce a combination of income and growth through a portfolio of investment grade government debt, although it shuns the UK.
A weighting of 31.1 per cent means Germany is currently its biggest regional position, followed by Norway, Canada and the US.
With yields on developed government debt at all time lows, this is a fund that many may feel is poor value at the moment; however, for anyone who is particularly pessimistic and feels yields could fall further, this could be the perfect option.
M&G International Sovereign Bond requires a minimum investment of £500 and has a TER of 1.19 per cent.
Riddell took over as lead manager from Jim Leaviss in February 2010.
Fidelity Moneybuilder Balanced
This mixed asset fund is run by two of the most respected managers in their respective fields – Ian Spreadbury and Michael Clark. It is cheap, with a TER of 1.21 per cent, and does not have an initial charge.
The five crown-rated portfolio is consistently split 3:1 between equities and bonds. Clark manages the equity side, while Spreadbury is in charge of the fixed interest one.
It has consistently beaten its IMA Mixed Investment 40-85% Shares sector, with less volatility, and has a particularly good record over five years, boasting returns of 32.42 per cent.
It is a favourite with the FE Research team, who included it in the FE Select 100 list.
In the latest fund report, the team said it is particularly well-suited to investors with a short time-frame and who like a balance between income and capital growth.
It is currently yielding 4.1 per cent and is available for a minimum investment of £500.