The managers behind the Premier Multi-Asset Global Growth fund have bought a just-launched US equity investment trust, taken exposure to US alternative assets and found a “strong addition” to its stable of active Asian equity managers in a batch of recent portfolio moves. 
Premier Multi-Asset Global Growth – which is managed by David Hambidge, Ian Rees, Simon Evan‑Cook and David Thornton – has been one of the strongest performers of the IA Flexible Investment sector over recent years, sitting in the peer group’s top decile over three and five years.
Since Hambidge and his team took over the fund in July 2012, it has made a 111.59 per cent total return and is the third best performer from its sector. While it has been slightly more volatile than its average peer over this time, it is also top-decile for risk-adjusted returns as indicated by the Sharpe, Sortino and Treynor ratios.
Performance of fund vs sector under team
Source: FE Analytics
The £190.4m fund – which is the highest risk offering from the team’s range and has a focus on maximising long-term growth – has a value-orientated approach to multi-asset investing, seeking to invest in strategies that are cheap relative to their own history or other investment opportunities.
Explaining the portfolio’s current positioning, Premier senior multi‑asset investment manager Simon Evan‑Cook said: “Our view on equities currently is that, in most parts of the world, they still offer reasonable prospects for those prepared to ride out any short-term bumps. So we are comfortable being close to fully invested in the very best active managers in those markets.”
However, he added that the team is “less comfortable” with the valuation of US equities and noted that Premier Multi-Asset Global Growth’s 5 per cent exposure to US equity funds is low when compared with other global equity-heavy multi-asset offerings.
Where Premier Multi-Asset Global Growth does own US equities, it will only hold “the best and most highly-active” managers. With this in mind, it has recently taken a position in the Baillie Gifford US Growth Trust, which launched in March 2018.
Baillie Gifford US Growth Trust is managed by Gary Robinson, who is supported by the firm’s US team and its wider investment team. The portfolio targets exceptional businesses with a strong management culture that have the potential to grow several times bigger over the coming years. Up to half of the portfolio can be invested in unlisted companies.
Evan‑Cook explained: “This largely replaced our holding in the Baillie Gifford American fund, run by the same team. We prefer to hold the trust as they will be able to access unlisted companies, which offer better long-term prospects as we – and they – are confident they’ll be paying less for companies with higher growth potential.
“Baillie Gifford have a genuinely long-term outlook, and so do we, so this fits perfectly in our portfolio. That said, we are well aware that at some point Baillie Gifford’s aggressively pro-growth style will go through a rough patch, which is why our holding size is fairly modest, and we hold other fund managers alongside them who manage in completely different styles.”
Performance of fund vs sector and index under Robinson
Source: FE Analytics
As the chart above shows, Robinson has established a strong track record since taking over the £1.1bn Baillie Gifford American fund in May 2014, with the 117.08 per cent total return being the third highest in the IA North America sector and significant outperformance of the S&P 500 index.
A holding in EJF Investment, a Jersey-domiciled investment trust that invests in assets benefitting from regulatory and structural change in the financial services sector, has also been added to the Premier fund’s portfolio. The Premier managers see this trust as being well positioned to benefit from rising interest rates, changes in the regulation of small US banks and significant tax cuts; they added that it could offer equity-like returns at a time when equity valuations appear stretched.
“We are also getting some exposure to the US through alternative assets, ideally in places where the thundering herd of passive investors can’t go. This is part of the reason we’ve added a small position in EJF Investment, a niche investment trust that invests in structured debt and equities,” Evan‑Cook said.
“This trust is nimble enough to be able to benefit from regulatory changes affecting smaller US banks and we think its annualised returns from here can easily outpace those of the main US equity market.”
The final recent addition to Premier Multi-Asset Global Growth’s portfolio is Coupland Cardiff Asia Alpha, which offers concentrated high conviction exposure to the Asia Pacific region. Angus Coupland – one of the founders of Coupland Cardiff – took over the portfolio at the start of 2016 and the Premier team like his approach of finding high-quality Asian businesses that are protected by unique features of their business or industry.
“We’ve had great success from our active Asian equity managers in recent years, and we think this fund is a strong addition to that stable,” Evan‑Cook said.
“As with all of our holdings, it is highly active with its manager – Angus Coupland – focused on finding a limited number of excellent Asian companies that will benefit from strong competitive positions within their industry.”
Performance of fund vs sector and index under Coupland
Source: FE Analytics
The portfolio will typically hold between 25 and 35 stocks. These tend to fall into three opportunity sets: fundamental opportunities, which are large-cap companies with good growth prospects; special situations, which are catalyst-driven opportunities at a stock level; and undiscovered gems, or opportunities in the under-covered small- and mid-cap sectors.