Jupiter Merlin Balanced Portfolio remains the most heavily researched IA Mixed Investment 40%-85% Shares fund on FE Analytics, our data shows, although there are also signs that passive strategies are becoming increasingly popular with advisers.
With global stock markets going through a rough ride at the same time bonds came under pressure, it’s no surprise that 2015 was a relatively challenging year for multi-asset funds. Our data shows that the average member of the IA Mixed Investment 40%-85% Shares sector – the peer group with the highest allocation to equities – made a total return of just 2.67 per cent last year.
However, as the graph below shows, this was higher than the gains seen in both the FTSE All Share and the Barclays Sterling Gilts index. The average multi-asset funds also gave investors a smoother ride than equities, with annualised volatility of 8.43 per cent compared with 12.30 per cent from the FTSE All Share.
Performance of sector vs indices in 2015
Source: FE Analytics
Investor attention for IA Mixed Investment 40%-85% Shares funds was strong over the year, with data from the Investment Association showing it to be 2015’s fifth best-selling sector after taking in around £1.5bn in fresh retail money.
In addition, we can use the FE Analytics Market Intel tool to drill down further into the sector to see which funds advisers were paying the most attention to across the year.
With assets of £1.5bn making it one of the largest members of the sector, no-one is likely to be shocked that Jupiter Merlin Balanced Portfolio was the IA Mixed Investment 40%-85% Shares fund researched most frequently in 2015.
Headed up by FE Alpha Managers John Chatfeild-Roberts and Algy Smith-Maxwell, the multi-manager fund can be seen as a ‘one-stop’ shop for investors and offers exposure to some of the best underlying funds in the business. It counts the likes of CF Woodford Equity Income, AXA Framlington UK Select Opportunities, Fundsmith Equity and Prusik Asian Equity Income as holdings.
Jupiter Merlin Balanced Portfolio, which is a member of the FE Invest Approved list, held up well in the turbulent conditions of 2015 with its 5.22 per cent total return putting it in the top quartile of its peer group. Over the long term, the fund has also performed strongly and is ranked 8 out of 47 funds since launch in 2002 after gaining 186.55 per cent.
The fund was also the most researched member of its sector in 2014, as can be seen in the below table. However, you can also see that there’s been a change in second most researched fund.
Source: FE Analytics Market Intel
7IM AAP Moderately Adventurous is a fund of funds product that predominantly invests in passive strategies but applies an active approach to asset allocation.
Against its neutral strategic positioning, the portfolio is currently underweight UK equities, US equities, gilts and commodities but is running decent overweights to European, Japanese and emerging market equities as well as cash.
The fund has won recognition with investment analysts; Square Mile Investment Consulting & Research, for example, gives it a ‘recommended’ rating.
“We believe this is a strong proposition for investors looking for a highly diversified and institutional style approach to investing and who wish to target a specified level of risk,” Square Mile said. “Whilst the funds will predominantly use passive or systematically managed strategies the fund is unquestionably actively managed.”
While Seven Investment Management’s fund takes an active approach, there are other heavily researched funds on the list that are undoubtedly passive. Last year, Vanguard LifeStrategy 60% Equity was the 10th most viewed fund on FE Analytics but it has climbed into fifth place while Vanguard LifeStrategy 80% Equity has moved from 17th to eighth.
Both funds are built from Vanguard equity and bond index funds. They have a static asset allocation and are automatically rebalanced to prevent them from gradually drifting away from their target allocation. Vanguard also claims this approach prevents investors from rebalancing portfolios during times of market stress, which can lead to emotional decisions.
Since launch in June 2011, the funds have performed strongly relative to their respective peers. Vanguard LifeStrategy 80% Equity has made 32.34 per cent over this time while Vanguard LifeStrategy 60% Equity has made 32.19 per cent; this puts both funds in the top decile of the IA Mixed Investment 40%-85% Shares sector.
Performance of funds vs sector since launch
Source: FE Analytics
FE Analytics also shows that Vanguard LifeStrategy 60% Equity was the sector member attracting the highest level of inflows over 2015, bringing in £485.5m across the year. Vanguard LifeStrategy 80% Equity is in second place after gaining £211.2m while 7IM AAP Moderately Adventurous comes in third at £185.9m.
Jupiter Merlin Balanced Portfolio, on the other hand, witnessed net outflows of around £170m last year, according to our data.
Three funds have fallen off the list of the 10 most researched funds to make room for new entrants 7IM Moderately Adventurous, Royal London Sustainable World Trust and Vanguard LifeStrategy 80% Equity.
The fifth most researched fund of 2014 – Neptune Balanced – is only just outside the top 10 in 11th place while EdenTree Higher Income has gone from eighth to 12th on the list. Jupiter High Income has made the biggest fall though, after moving from ninth to 21st over the space of the last year.
