The likes of Neil Woodford and Nigel Thomas have sterling reputations, and for very good reason, but many boutique houses have some top-rated fund managers in their arsenal, even if their marketing budgets do not always allow them to get their names into the mainstream.
Here, we highlight five FE Alpha Managers that may have gone under investors radars:
Victor Wood
Victor Wood is a highly experienced fund manager with more than 40 years of experience, but most retail investors are likely to never have heard of him.
He heads up the McInroy & Wood Balanced and McInroy & Wood Income portfolios, which have around £250m assets under management (AUM) apiece. They both have four FE Crowns and are both top-quartile performers in their IMA Mixed Investment 40-85% Shares sector over three, five and 10 years.
Over the last decade, the Balanced and Income funds have returned 201.78 per cent and 181.51 per cent respectively, compared with 115.91 per cent from their sector average.
Performance of funds vs sector over 10yrs
Source: FE Analytics
The Balanced fund has consistently outperformed the Income fund on a total return basis, as it does not have as strict an income mandate and so can focus more on capital growth.
The McInroy & Wood Income portfolio naturally has a higher yield, currently at 3.2 per cent. It is also less volatile than its counterpart.
Both have an 80/20 split between equities and fixed interest at present. The Income portfolio boasts typical dividend-paying names in its top-10, including GlaxoSmithKline and National Grid.
The Balanced portfolio has many of the same names, but has more exposure to smaller and mid cap companies. Abbott Laboratories and Ecolab are both top-10 positions.
The McInroy & Wood funds are only available on a select number of platforms, including Transact and Nucleus. A minimum initial investment of at least £10,000 is required if going through the fund house.
Both of Wood’s funds have a total expense ratio (TER) of 1.55 per cent.
Chris Hutchinson
Unicorn’s Chris Hutchinson (pictured) is one of the 61 newcomers to the FE Alpha Manager list. His colleague John McClure has turned heads in recent months, thanks to the stellar performance of his Unicorn UK Income fund. Increasing inflows have followed as a result.
However, Unicorn has another rising star in Hutchinson, whose five crown-rated Unicorn Outstanding British Companies fund is a consistent top performer in its IMA UK All Companies sector.
Performance of fund vs sector and benchmark
| Name | 1yr (%) | 3yr (%) | 5yr (%) |
|---|---|---|---|
| Unicorn - Outstanding British Companies |
19.87 | 77.67 | 95.5 |
| FTSE All Share | 14.27 | 39.84 | 32.51 |
| IMA UK All Companies | 14.35 | 39.14 | 31.71 |
Source: FE Analytics
According to FE data, the fund is a top-decile performer in its sector over three and five years, with returns of 77.67 and 95.5 per cent respectively, and top quartile over one.
It has comfortably beaten its All Share benchmark in the process as well.
However, despite its dominance, Unicorn Outstanding British Companies has only £11.8m assets under management (AUM), and is only available on certain platforms.
Hutchinson runs a concentrated portfolio of around 25 stocks, with more than 50 per cent of assets invested in the top-10 companies alone.
He targets firms that are world leaders in their respective fields and invests across the market cap spectrum.
In spite of its overweight in small and mid caps, the fund is consistently less volatile than both its sector and index. Over five years, it has an annualised score of 16.1 per cent, compared with 17.96 per cent from the IMA UK All Companies sector and 17.09 per cent from the FTSE All Share.
Among the manager's top-10 holdings are Rolls Royce and heating company Bodycote, which sits in the FTSE 250.
Hutchinson has been manager of the fund since January 2007. It requires a minimum investment of £2,500 and has a TER of 1.74 per cent.
He also heads up Unicorn UK Smaller Companies, with co-manager McClure.
Mary McBain
There is a shrinking pool of investable top-rated managers in the emerging markets sector as a result of various soft-closures; however, Ruffer’s Mary McBain is a viable alternative.
Her CF Ruffer Pacific fund can invest in both emerging Asia and Japan, which enables her to dampen the volatility associated with emerging markets.
The £178m portfolio, which has five FE Crowns, sits in the IMA Specialist sector, which makes McBain even more elusive as it is difficult to compare her fund to a peer group.
However, a closer look at the fund’s performance reveals McBain more than holds her own.
It has outperformed its MSCI Asia Pacific benchmark, as well as the average fund in IMA Asia Pacific inc Japan, over one, three and five years, with significantly less volatility.
It has even beaten the more volatile IMA Asia Pacific ex Japan sector average over one and five years, but falls slightly short over three.
McBain currently has only 10 per cent invested in Japan and a further 15 per cent in cash. The rest is in emerging Asia.
CF Ruffer Pacific requires a minimum investment of £1,000 and has a TER of 1.59 per cent. It is included in the FE Select 100.
Toby Ricketts
Fund of funds expert Toby Ricketts has also been an FE Alpha Manager for the last five consecutive years. He runs six portfolios at Margetts in total.
Four of the six are top-quartile performers in their respective sectors over one, three and five years. These include the Margetts Select Strategy and Venture Strategy funds, which are also top quartile over 10 years.
Performance of manager vs peer group over 10yrs
Source: FE Analytics
The outperformance of his funds has seen him climb high above his peer group composite over the last decade, with returns of 159.71 per cent.
Ricketts tends to invest in large, established funds under well-known fund groups. The five crown-rated Margetts Opes Growth fund includes First State Asia Pacific Leaders, Invesco Perpetual High Income and Schroder US Smaller Companies in its top-10.
Many of his funds have a significant emerging markets bias at present; according to FE data, his £70m Margetts Venture Strategy portfolio, which sits in the IMA Flexible Investment sector, has 34 per cent in Asia Pacific and 28 per cent in other emerging markets.
All of Ricketts’ funds require a minimum investment of £1,000 and have a TER of between 1.6 and 1.75 per cent.
Simon Pickard
The inclusion of managers who head up offshore funds in the IMA universe has seen a number of unfamiliar faces make their way on to the FE Alpha Manager list this year.
Simon Pickard is one of them – he has led the Carmignac Emergents fund to returns of 412.24 per cent over the last decade, significantly beating its IMA Global Emerging Markets sector average and MSCI Emerging Markets benchmark, which have returned 366.89 and 390.73 per cent, respectively.
Only four funds in the entire IMA Global Emerging Markets sector have returned more, three of which are closed to new money.
The fund has also outperformed its sector and benchmark over one, three and five years, with around the same volatility.
Carmignac Emergents is predominantly a large cap portfolio, but has around 30 per cent in mid caps.
Around half of its assets are in Asia, with the rest in Latin America, emerging Europe and the Middle East & Africa.
Carmignac Emergents has a TER of 1.81 per cent. The €2bn portfolio requires a minimum investment of £1,000 and is available on the Novia platform.
Pickard has beaten his peer group composite over one, three, five and 10 years. He also heads up the Carmignac Emerging Patrione fund.
The newly appointed FE Alpha Manager told FE Trustnet in a recent interview that he expects there to be a major crisis in China within the next 10 years.