Not a single fund in the IMA UK All Companies sector achieved this, with the average fund in the sector losing 31.96 per cent in the financial collapse of 2008.
While, as expected, bond funds protected well when markets took a tumble in the crisis, the recent rise in US and UK government yields has sent bond funds spiralling, taking them into negative territory in 2012 and so far in 2013.
FE Trustnet looks at the five funds – CF Ruffer Equity & General, Troy Trojan, CF Cautela, AXA Global Distribution and CF KB Ramogan – that have proved their mettle in tough times and kept on going in rising markets.
Year-on-year performance of funds since 2008
| Name | 2013 (%) | 2012 (%) | 2011 (%) | 2010 (%) | 2009 (%) | 2008 (%) |
|---|---|---|---|---|---|---|
| CF Ruffer Equity & General | 17.71 | 7.54 | 3.52 | 7.97 | 14.68 | 7.33 |
| Troy Trojan | 1.25 | 2.11 | 8.52 | 14.4 | 11.68 | 1.11 |
| CF Cautela | 6.1 | 1.68 | 3.51 | 13.46 | 11.27 | 2.23 |
| AXA Global Distribution | 9.71 | 6.92 | 0.06 | 11.57 | 6.92 | 0 |
| CF Ramogan | 0.74 | 1.56 | 3.7 | 2.05 | 2.77 | 3.73 |
Source: FE Analytics
CF Ruffer Equity & General
The £191.4m CF Ruffer Equity & General fund has been managed by FE Alpha Manager Alex Grispos since 2008.
In each calendar year since he took over the portfolio, it has delivered consistently positive returns – even in the down markets of 2008 and 2011.
The fund has also managed to beat the IMA Flexible Investment sector over one, three and five years on a cumulative basis. Although it is unconstrained and does not adhere to a particular benchmark, it does use the FTSE All Share as a basis for comparison, which it has beaten over five years, with returns of 74.02 per cent.
Performance of fund vs sector and index over 5yrs
Source: FE Analytics
Part of Grispos’ success comes from his willingness to allow the fund to build up a healthy cash reserve in order to take advantage of out-of-favour stocks, falling in line with his out and out value bias.
The manager keeps a highly diversified portfolio of roughly 100 stocks, 22.4 per cent of which are in the top-10. The majority of his holdings are in blue chip names such as Google, BP and Johnson & Johnson.
CF Ruffer Equity & General requires a minimum investment of £1,000, and has an ongoing charges figure (OCF) of 1.56 per cent. It is available across a number of platforms.
Troy Trojan
Sebastian Lyon’s £2.5bn Trojan portfolio is well-known for its cautious stance, which helped it to protect itself in the falling markets of 2008 and 2011.
While the fund has underperformed its peers over three years, it has continued to deliver positive returns in every calendar year in the last decade and has outperformed over the long-term. Over the last five years, the fund has made 56.4 per cent, beating both the IMA Flexible Investment sector and the FTSE All Share, which gained 33.74 per cent and 53.97 per cent respectively.
Lyon (pictured) recently told FE Trustnet he was concerned there was a far bigger market correction on the horizon than the one seen in June. As a result, he is holding firm on his overweight position in gold, in spite of the asset class’s recent underperformance.
The highest weighting in the fund is to gold bullion securities, at 7.4 per cent. Lyon also has a weighting to physical gold ETFs in his top bets, and defensive blue chips such as British American Tobacco and Coca-Cola.
The fund is closed to new investors but they can still access it from certain platforms.
CF Cautela
Sitting in the IMA Mixed Investment 20%-60% Shares sector, the tiny CF Cautela portfolio is another example of a slow and steady performer, keeping an even keel even in the rough waters of 2008 and 2011.
The £42.5m fund is tipped towards fixed interest, holding three index-linked gilts in its top-10 holdings. The fund also has exposure to blue chip UK companies such as Centrica and Tesco.
The fund is also backing BlackRock Gold & General, which has taken a beating as gold and mining stocks continue to suffer.
However, the Cautela portfolio has continued to outpace its peers over three and five years, although it has lagged behind them over the past 12 months.
Over five years, the fund has made 51.69 per cent while the sector is up just 29.78 per cent, according to FE Analytics.
Performance of fund vs sector over 5yrs
Source: FE Analytics
The fund requires a minimum investment of £1,000 and has ongoing charges of 2.06 per cent.
AXA Global Distribution
Benefiting from the long-standing expertise of managers Jim Stride and Richard Marwood, the £344.5m AXA Global Distribution fund has kept its head above water in all market conditions.
The fund aims to achieve growing income with the prospect of capital growth over the medium- to long-term.
AXA Global Distribution is yielding 2.54 per cent and has outperformed the IMA Mixed Investment 20%-60% Shares sector over one, three, five and 10 years.
Over the last decade, the fund has made 95.75 per cent. The average fund in the sector gained 69.67 per cent.
The managers have been backing inflation-linked bonds recently and continue to hold a number of index-linked gilts and US Treasuries.
While the majority of the portfolio is invested in international equities, at 52.78 per cent, all of the fund’s top-10 holdings are in UK, US or European sovereign debt. All of the fund is invested in investment grade bonds rated BBB or higher.
The fund requires a minimum investment of £1,000 and has ongoing charges of 1.52 per cent.
CF KB Ramogan
The Kleinwort Benson fund has just £9.9m in assets under management but has been one of the most consistent funds in the IMA Flexible Investment sector over the last decade, delivering positive returns in every single calendar year since 2003.
Much like the Ruffer portfolio, the fund has a high weighting to cash and cash-like assets, at 15.05 per cent of AUM. The bulk of its holdings are in corporate bonds, predominantly in the UK, although it does have some exposure to emerging markets, North America and the Asia Pacific region. The fund currently only has 14.28 per cent in UK equities.
Among the fund’s top holdings are short-dated index-linked gilts, Polar Capital Emerging Markets Income and the Aberdeen Emerging Markets portfolio. The fund is extremely concentrated, with the top-10 holdings accounting for 93 per cent of the fund.
It has a total expense ratio (TER) of 1.12 per cent.
Another fund to note is CF Miton Special Situations, run by FE Alpha Manager Martin Gray and James Sullivan.
The only time CF Miton Special Situations lost money was in 2012 when it was down 0.63 per cent. Otherwise the fund has delivered positive returns in each of the last 10 calendar years, including so far in 2013.
