Baillie Gifford Global Select, Merian Global Equity Income and Capital Group New Perspective stand out as the best performing new global funds, according to a study by FE Trustnet.
Investors often wait three years to see if a fund manager has proof of concept, waiting for the track record to give confidence in their ability. However, this can be both a good and bad thing.
While you may avoid some clangers, you could end up missing out on some pretty decent returns.
In this series on the funds launched during the second half of 2015, we have already looked at the UK sectors. For this article we have considered those with a global remit.
Please note, for this we have only looked at funds that have attracted more than £100m in assets under management since launch.
The top performer of the funds below on an absolute basis is the £322m Baillie Gifford Global Select fund, run by a team of managers that each specialise in different regions.
Like other products by Baillie Gifford, the Global Select portfolio is growth-orientated, with the ‘portfolio construction group’ taking the best ideas from their individual equities teams before constructing the portfolio of 70-100 stocks.
Currently, the fund is 56 per cent weighted to US equities, with 13 per cent invested in Japanese names and 5.5 per cent in China. The UK represents just 5.1 per cent of the portfolio.
Performance of fund vs sector & benchmark since launch
Source: FE Analytics
Since it launched in December 2015, the portfolio has returned 70.39 per cent, beating both the MSCI AC World index and average IA Global sector peer, as the above chart shows. The top-quartile performance makes it the third-best in the sector over the period.
The other top-quartile performer in the IA Global sector to launch in the second half of 2015 is also the largest.
The $3.6bn Capital Group New Perspective (LUX) fund is another that is managed by a group of fund managers that have a team-based approach.
While the European version of this strategy is relatively new, the US version has been around since the 1970s, meaning it has seen a number of market cycles.
It focuses on stocks that receive at least 25 per cent of their revenues from outside the domestic market and have a market capitalisation of at least $3bn.
Since its launch in October 2015, the fund has returned 52.92 per cent, making it the 46th best-performing fund of the 262 funds in the sector with a long-enough track record.
Allianz Best Styles Global AC Equity follows next, having returned 42.5 per cent, although this is below the sector average over the period since its launch in December 2015.
The £108m portfolio has been managed by Erik Mulder since 2017, although it was launched under former manager Rainer Tafelmayer.
The portfolio holds 56 per cent in US names with double-digit sector weights in both technology and financials stocks of 16.2 per cent and 16.1 per cent respectively.
The £151m Schroder Global Recovery fund run by Andrew Lyddon, Kevin Murphy and Nick Kirrage and is part of the Schroder Value team’s offering. It aims to invest in companies trading at significant discounts to their intrinsic values.
The style has faced strong headwinds since its inception as – excluding a brief period in the second half of 2016 – growth stocks and momentum-driven trades have largely led the markets higher.
Table of ‘new’ funds performance since launch
Source: FE Analytics
The fund has returned 41.5 per cent since October 2015, making it the 158th-best out of a possible 262 funds – a third-quartile achievement.
Last is the $255m UBS (Lux) Equity SICAV - Global Opportunity Unconstrained fund managed by Maximilian Anderl and Jeremy Leung, which has returned 39.12 per cent since its inception in September 2015 – a bottom-quartile effort.
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Turning to the IA Global Equity Income sector, Merian Global Equity Income (IRL) has been the best fund in its peer group since launching in July 2015.
Managed by Amadeo Alentorn, Ian Heslop and Mike Servent, the fund is run with an emphasis upon qualitative decisionmaking, using a systematic process based on rules and risk controls to make trading decisions in a methodical way.
As such, it should not have any particular behavioural biases – moving across styles when appropriate. The managers also look at shares of companies as rented rather than bought, meaning they are dispassionate about where the portfolio is invested.
As such, the diversified fund has 426 holdings with 54.4 per cent held in US names and – on a sector basis – 18 per cent invested in technology companies.
Performance of fund vs sector & benchmark since launch
Source: FE Analytics
Since its launch in July 2015, the fund has returned 56.03 per cent, beating the MSCI AC World and IA Global Equity Income sector by 7.92 and 23.39 percentage points respectively.
The other fund from the sector launching in the second half of 2015 was the £151m Artemis Global Equity Income managed by Jacob de Tusch-Lec.
The portfolio, which is largely weighted to financials, miners and energy stocks, has returned 26.59 per cent since June 2015, a third-quartile performance among sector peers.
Recent market volatility has suggested that a rotation to the value style – which income funds generally have a natural bias towards – could be underway, the manager noted in its latest factsheet.
However, conditions remain muddied by political uncertainty – including a potential trade war, worries over Italy’s debt burden and elections in Brazil – that it remains to be seen whether this rotation will happen immediately or will drag on for some time to come.