Eight fund managers who could weather the Brexit storm

16th June 2016

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As the European Union vote looms and the outcome odds narrow, investors want to know how to protect their portfolios. And with the US election following hot on the referendum’s heels, volatility is likely to remain a fact of life wherever you invest this year. Who has previously proved they can steer their fund through a stock market storm?

Darius McDermott, managing director of Funa Calibre considers the options. The research firm has identified eight managers of Elite Rated funds with a track record of outperformance in turbulent times, whose tenure goes back to before the global financial crisis.

“Each manager outperformed their sector average over the period from May 2008-March 2009, when stock markets really started tumbling to their post-crisis lows, and also outperformed the FTSE All Share, the market in which UK investors tend to have their largest holdings.

“These managers have also withstood the latest bout of global volatility, again beating the UK market and their sector in the year-to-date. Finally, their long-term returns speak for themselves, with all nine funds also outperforming over the period from May 2008 until today,” he says.

Baillie Gifford Japanese

19th May 2008 to 3rd March 2009: -22.18% (IA Japan -24.3%)
1st January 2016 to 13th June 2016: 4.85% (IA Japan 1%)
19th May 2008 to 13th June 2016: 90.98% (IA Japan 46.23%)

It’s been a rough ride for Japanese equities this year, but Sarah Whitley, manager of the Baillie Gifford Japanese fund since 2007, has steered her team of six analysts adroitly through the storm. This is one of the oldest Japan funds in the sector and it has earned its stripes in terms of delivering returns even in the most difficult market conditions.

Fidelity Strategic Bond

19th May 2008 to 3rd March 2009: -1.44% (IA Sterling Strategic Bond -16.18%)
1st January 2016 to 13th June 2016: 5.55% (IA Sterling Strategic Bond 3.64%)
19th May 2008 to 13th June 2016: 81.48% (IA Sterling Strategic Bond 50.2%)

Fund manager Ian Spreadbury joined Fidelity in 1995 and has managed this fund since 2005. Ian has the experience to navigate the complex waters of the fixed income market. He adheres to the three pillars of bond investing: income, low volatility and low correlation to equities, providing diversified exposure in a ‘core’ bond fund.

First State Global Listed Infrastructure

19th May 2008 to 3rd March 2009: -30.75% (IA Global -35.69%)
1st January 2016 to 13th June 2016: 16.79% (IA Global 3.44%)
19th May 2008 to 13th June 2016: 95.33% (IA Global 48.15%)

The fund has been managed since its launch in 2007 by Peter Meany, a pioneer in infrastructure investment. It seeks to deliver income and some capital growth by investing in listed infrastructure (including utilities) companies. The investible universe for infrastructure is relatively small and with that, Peter selects only those he believes can earn returns above consensus expectations. Out of roughly 180 companies that the team have identified and monitor, only around 40 are included in the portfolio.

Investec Cautious Managed and Investec UK Special Situations

19th May 2008 to 3rd March 2009: -16.84% and -29.34% (IA Mixed Investments 20%-60% Shares -21.01% and IA UK All Companies -40.94%)
1st January 2016 to 13th June 2016: 5.62% and 0.76% (IA Mixed Investments 20%-60% Shares 1.96% and IA UK All Companies -1.53%)
19th May 2008 to 13th June 2016: 56.91% and 84.37% (IA Mixed Investments 20%-60% Shares 33.9% and IA UK All Companies 47.88%)

Alastair Mundy appears twice in our list, with his UK Special Situations and Cautious Managed funds. In the former, Alastair invests in unloved companies that he believes can generate strong returns. In the latter, Alastair combines his distinctive contrarian equity investment process with bonds, as well as gold and cash. The intention is for the equity portion to drive the long-term performance, while the fixed income portion reduces the volatility.

Jupiter Merlin Balanced

19th May 2008 to 3rd March 2009: -22.21% (IA Mixed Investments 40%-85% Shares -29.31%)
1st January 2016 to 13th June 2016: 1.56% (IA Mixed Investments 40%-85% Shares 1.37%)
19th May 2008 to 13th June 2016: 62.57% (IA Mixed Investments 40%-85% Shares 38.29%)

John Chatfeild-Roberts has headed up the Merlin team on this multi-asset, income and growth-focused fund of funds since 2002. Like John, his co-managers Peter Lawery and Algy Smith-Maxwell have more than 20 years of industry experience apiece. Research for which funds go into the portfolio focuses heavily on finding managers who can deliver throughout the market cycle and bring different attributes.

Liontrust Special Situations

19th May 2008 to 3rd March 2009: -31.25% (IA UK All Companies -40.94%)
1st January 2016 to 13th June 2016: 1.43% (IA UK All Companies -1.53%)
19th May 2008 to 13th June 2016: 169.02% (IA UK All Companies 47.88%)

Anthony Cross has managed this fund since its inception in 2005. He was joined by co-manager Julian Fosh in 2008. Anthony and Julian have a distinctive investment process that focuses on finding companies that can grow their earnings independently of the wider economy, investing across UK stocks of any size or sector to achieve returns.

Schroder Asian Income

19th May 2008 to 3rd March 2009: -35.1% (IA Asia Pacific ex Japan -38.47%)
1st January 2016 to 13th June 2016: 6.6% (IA Asia Pacific ex Japan 4.63%)
19th May 2008 to 13th June 2016: 86.5% (IA Asia Pacific ex Japan 41.61%)

Richard Sennitt joined Schroder in 1993 and has managed this fund since 2001. The fund gives investors access to higher growth Asian economies, excluding Japan but including Australia and New Zealand. Consistent with the region in which it invests, the fund is more risky than the UK stock market, although its returns have beaten the FTSE All Share over our specified period. Because of Richard’s preference for income-paying stocks it is also likely to be less volatile than some other Asian funds.

Schroder US Mid Cap

19th May 2008 to 3rd March 2009: -22.82% (IA North America -30.12%)
1st January 2016 to 13th June 2016: 11.57% (IA North America 4.41%)
19th May 2008 to 13th June 2016: 153.33% (IA North America 104.01%)

Run out of New York by Jenny Jones since 2005, this fund has a small and mid-cap focus and stands out from the crowd for the manager’s stock-picking prowess. Despite it targeting smaller companies, the fund is set up quite cautiously and has a disciplined investment process that has held up well in tough markets.

FTSE All Share

19th May 2008 to 3rd March 2009: -43.29%
1st January 2016 to 13th June 2016: -1.45%
19th May 2008 to 13th June 2016: 37.11%

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