After close to five years at FE Trustnet, our esteemed leader and head honcho Josh Ausden is leaving the company to start up his new role as head of client investment strategy at Neptune next week. 
As he pointed out during his presentation at the recent FE Trustnet Select Event for emerging markets and Asia Pacific ex Japan, a lot has changed over this time. Funds, managers and even groups have come and gone while, unfortunately, his hair has departed and has been missing ever since…
However, one remarkable change is the growth in FE Trustnet as a website, with our readership and popularity having gone through the roof over the past half a decade. Personally, I think Josh has been an instrumental force behind that success.
He has overseen some major re-working of the look and feel of the website but also the way in which we as a team think and write about the industry – all of which has carved out FE Trustnet’s own niche within the world of fund management.
Apart from running a tight ship and his clear love of funds, Josh has been a major influence on my career so far and this is something I will always be thankful for. He quickly took me under his wing and has acted as a mentor ever since.
Without being overly soppy, I’m not sure where I would be if it wasn’t for his help and guidance.
So, all told, it’s a pretty sad day here in the office – which isn’t helped by the fact it was his official leaving do last night (which was attended by all corners of the industry), so everyone is feeling slightly sorry for themselves.
However, as we all know, change happens and while we are sad to see Josh leave I’m very excited for Gary Jackson to take over the reins.
Gary, who played an integral role in FE's hard hitting income campaign and has been exerting his own influence on the team since he took over his role as editor, has worked within the industry for a number of years now and has a vast knowledge of all things funds. Suffice to say, he is another true fund geek.
In an article next week, he will be running through some of his plans for the website and a closer look at our upcoming campaigns.
Nevertheless, I speak for everyone here at FE Trustnet when I say Josh will be sorely missed. However, before he turns to the dark side, we thought it would be a fitting send-off to run through some of our resident fund geek’s most-read stories.
Five funds that have lost their charm
First up is this article from March 2013, when Josh looked at the funds that had been removed from the FE Select 100 during the list’s first rebalancing and asked FE Research’s Oliver Clarke-Williams why they had been dropped.
M&G Managed Growth, which was headed at the time by Graham French, was the first fund to be covered. It was removed from the Select 100 after its FE Crown Rating dropped from three to one, following a period of underperformance when it came to stockpicking, consistency and risk control.
Commenting on the article, one of our readers – Nick – said: “How do funds do after they've been bumped off this list?” Well, since publication M&G Managed Growth has fallen 11.01 per cent, compared with a 7.25 per cent return from the average IA Flexible Investment fund and a 15.29 per cent rise in its FTSE World index benchmark.
Performance of fund vs sector and index since 14 March 2013
Source: FE Analytics
The fund has also undergone a number of manager changes over this time.
French handed over the portfolio to Randeep Somel in July 2013 but it was recently announced that Somel will step down to concentrate on M&G Global Basics; Dave Fishwick will take over M&G Managed Growth and gradually phase in a new approach, based upon the successful one used by his M&G multi-asset team.
Of course, Josh looked at four other funds within his article – Jupiter Emerging European Opportunities, Schroder Japan Alpha Plus, Psigma Income and Aviva Investors Managed High Income. Have another look at the story to see what the verdict was on each of these; the links at the side of the article will allow you to check up-to-date performance figures.
The ideal funds to sit alongside CF Woodford Equity Income
Pulling in a few more readers than the previous story was this piece, which was published in May 2014 when investors were eagerly awaiting the launch of Neil Woodford’s UK equity income fund.
There was no doubt that the launch of CF Woodford Equity Income was going to be a big deal – indeed, it ended up being the biggest fund launch on record after raking in £1.6bn during its offer period. However, in this piece Josh was more interested in which funds would best complement Woodford and asked the experts for some tips.
Henderson UK Equity Income & Growth, Unicorn UK Income and Schroder UK Alpha Income were the suggestions for portfolios that would fit in with Woodford and his large-cap, quality bias.
The Henderson fund was highlighted for its emphasis on dividend growth and tendency to outperform in rising markets; the Unicorn portfolio for its bias towards small caps; and the Schroders fund for the higher-turnover approach it uses to take advantage of different parts of the business cycle.
As the graph below shows, CF Woodford Equity Income has started well, with returns of 19.62 per cent since launch. Unsurprisingly, it is the best performer in the IA UK Equity Income sector over this time.
Performance of fund vs sector and index since launch
Source: FE Analytics
However, that’s a time frame of little more than one year and arguably one that has been suited to Woodford’s investment style, so the other funds’ relative underperformance doesn’t mean they should necessarily be ruled out as useful additions to an investor’s portfolio.
What to do if you think the markets are about to crash
When this article was published in February 2013, there was a lot of bearish comment around as many investors fretted that, following several years of rising markets on the back of ultra-loose monetary policy, things were on the brink of crashing down.
Josh caught up with FE Research head Rob Gleeson to find out the options available to investors worried by this. Given the rough ride that markets have given us over recent months and potential threats such as a looming rate rise in the US, slowing economic growth in China and unresolved debt burdens in Europe, it might be worth taking another look at this article.
Gleeson’s first point was to note that investors can always sit tight until things calm down: “This might not sound like a solution, but often doing nothing is the best thing you can do. If you’re a long-term investor and are confident in your funds, you might be best off riding it out.”
Of course, that’s not the only option open to investors. Gleeson gave three other potential courses of action – going fully into cash, switching into absolute return funds and shorting the index, which is the most extreme way of preparing for a crash.
The article certainly prompted a lot of comments, such as this one from Rudy: “Lots of gloom and doom about recently, ignore the market noise, timing the market is impossible. Invest in decent yielding stock, if the market drops, take it as a buying opportunity.”
It didn’t take that long for a crash to materialise, when the ‘taper tantrum’ hit markets in May 2013 after the Federal Reserve’s then-chairman Ben Bernanke warned the central bank would start to scale back its quantitative easing programme in the not-too-distant future.
Performance of indices from 22 May 2013 to 24 Jun 2013
Source: FE Analytics
The funds Mark Dampier holds in his pension portfolio
So we’re already at the second-biggest hitting story of Josh’s FE Trustnet career and here he kickstarted a fantastic series where he convinced some of the asset management world’s leading lights to reveal their personal investments. He started with Hargreaves Lansdown’s head of research Mark Dampier.
At the time, Dampier had just sold out of Invesco Perpetual High Income in order to buy the recently launched CF Woodford Equity Income fund. “I don’t think there’s anything surprising about it. Why would I? It’s the same manager, the same style of fund and it’s served me incredibly well,” he said.
The article also revealed that the head of research had a total of 12 per cent of his assets in Giles Hargreave, through his Marlborough Micro Cap Growth and Marlborough Nano Cap Growth funds, while other large holdings included Royal London Sterling Extra Yield Bond, HL Multi Manager Income & Growth and Artemis Strategic Assets. This may have changed since the article’s publication.
There were a lot of fans of this article and no wonder, as it offered valuable insight into how one of the industry’s most respected fund analysts was putting his knowledge to work in his own portfolio. Cambion, for example, commented: “Massive credit due here. Actually exposing one's personal portfolio to the baying masses shows integrity. Particularly so for including one's dogs. As for the actual portfolio, while it's quite different from something I'd put together, it seems pretty sensible to me!”
We really must restart this informative series, so keep your eyes open for more articles on which funds the industry’s biggest names are holding to prepare for their retirement.
Five must-have funds you can afford to buy, hold and forget about
A big ambitious headline here, as Josh attempted to find examples of funds that investors could feel comfortable buying for the long term without having to worry about overly rough periods when selling out becomes an overriding temptation.
Not that Josh can take all the credit for the headline, though. It is very similar to one FE Trustnet’s Anthony Luzio wrote a little while before – almost identical, in fact.
In looking for funds that have delivered the goods year in, year out, Josh started off with the little-known Guinness Global Equity Income fund, which Thesis fund of funds manager Steven Richard said was one he expected to hold for many years to come.
Richard told Josh: “We believe in Guinness Global Equity Income as a fund where we know exactly what we’re going to get. Overall their process is robust, repeatable and scalable and, in our view, this should help the fund maintain a consistent outperformance over the long run.”
The fund has outperformed its average peer since launch but is currently lagging its benchmark. However, it is less than five years old and was highlighted because its process is expected to perform strongly over longer periods of time.
Performance of fund vs sector and index since launch
Source: FE Analytics
Not everyone was a fan of smaller funds such as this one being included in the article. Theo said: “Small funds require constant vigilance. When their lucky run finishes, they fade quietly into oblivion without anyone noticing and, as for boutiques, they are excluded from all comparisons, only written about to praise them and generally treated like delicate violets.”
For Theo and others who prefer a large fund, there were bigger options examined in the article, so have another read to see what they are.
Well, that’s it: Josh’s biggest stories over his many, many years on the FE Trustnet team. All that remains now is to say have a great future at Neptune, Josh! We’re going to miss you.
