There are six funds in the IA Global sector that have made a positive return for investors in every one of the past 10 calendar years, according to data from FE Analytics.
Performance of funds over 10yrs
Source: FE Analytics
Of the 167 funds in the sector with a track record of this length, another eight made a positive return in nine of the past 10 calendar years.
Top of the six-name shortlist with returns of 268.65 per cent over the 10-year period is Seilern Stryx World Growth.
Stryx World Growth invests in high quality companies based in OECD countries. These typically have superior business models, stable and predictable economics, a sustainable competitive advantage and high returns on capital.
“They are run by a management team that exhibits integrity and whose interests are closely aligned with long-term shareholders,” the group noted.
It is worth highlighting that the fund’s managers – Corentin Massin, Michael Faherty and Fernando Leon – have only been in charge since May 2018 after former manager Raphael Pitoun left to join CQS.
The £695.6m Seilern Stryx World Growth fund has a total expense ratio of 1.71 per cent and limited platform availability in the UK.
Next up is the £1.1bn Morgan Stanley Global Brands fund which made 267.26 per cent over the 10-year period.
The fund, headed up by FE Alpha Manager William Lock since June 2009, consists of between 20 and 40 high-quality companies with high sustainable returns from dominant intangible assets, such as brands. These companies must have multiple products to avoid dependence on a single product and need to continually innovate to keep their customers loyal.
The FE Invest team added Morgan Stanley Global Brands to its Approved Funds List in December last year, saying: “The team has been running the strategy for a long time and although it may be considered a ‘steady Eddie’ type of investment, it has proved its defensive characteristics time and time again, protecting on the downside in 2008, 2011 and 2015.
“We’re confident in the team’s ability to pick long-term industry leaders who can defend themselves from the disruptors – that is, Amazon and Google.”
However, it warned that because the fund is concentrated and spread across just four sectors, it should be used as a satellite investment among a diversified portfolio of funds.
Morgan Stanley Global Brands has ongoing charges of 0.9 per cent. An offshore Sicav version of the fund came fifth on the six-name shortlist, with returns of 217.63. It is $12.6bn in size and has ongoing charges of 0.99 per cent.
Performance of funds vs sector and index over 10yrs
Source: FE Analytics
Another theme with a strong presence on the list is healthcare: Schroder Global Healthcare finished in third place with gains of 262.93 per cent and L&G Global Health & Pharmaceuticals Index Trust finished fourth with gains of 253.58 per cent.
The Schroders fund was also added to the FE Invest Approved Funds List, with the team noting that the group’s global network of 400 fund managers and analysts gives it ample scope to run a thematic fund: “Manager [John] Bowler has a history of investing in healthcare names, working at AXA before joining Schroders, and studying biology, physiology and biochemistry has given him an edge when asking companies difficult questions.”
However, it added: “Although the manager takes a balanced approach, investing across different sub-industries within healthcare, the fund is still a sector-focused fund and should be part of a wider diversified strategy.”
Performance of funds vs sector and indices over 10yrs
Source: FE Analytics
The £226.1m Schroder Global Healthcare fund has ongoing charges of 0.92 per cent.
L&G Global Health & Pharmaceuticals Index Trust tracks the performance of companies in the FTSE World index that are engaged in health, pharmaceutical or biotechnology activities.
The group said the fund is not designed for investors who cannot afford more than a minimal loss.
Unsurprisingly, as a tracker, the fund has by far the lowest ongoing charges figure of any one on the list, at 0.31 per cent. It is £505.2m in size.
Last on the list is Trojan Global Equity with gains of 202.12 per cent. The fund aims to invest in exceptional companies with high returns on invested capital, sustained by durable competitive advantages and strong balance sheets, run by sensible managers.
“We aim to buy them at better than fair prices,” said managers Gabrielle Boyle and George Viney. “The companies we invest in have staying power and have often been in business for well over a hundred years.”
In a recent note to investors, the managers said that despite the recent recovery in global asset prices, their attitude and approach remain unchanged.
“We remain concerned about the outlook for the global economy, the fragility of capital markets and the scarcity of bargains to be had in the sorts of companies we prefer,” the managers explained.
“At the same time, we are encouraged by the fundamental strength of the businesses contained in the portfolio and we believe this tight collection of world-class companies has favourable prospects for long-term growth.”
The £243.9m fund has ongoing charges of 0.93 per cent.