Performance Clinic revisited: where are they now?
by Harry Brooks on Jan 11, 2013 at 14:26
We take another look at the managers featured in last year's Performance Clinic, and see whether they've got back on track.
Who's bounced back?
Each issue of Citywire Global magazine features the Performance Clinic, highlighting a manager who has struggled with a period of underperformance in spite of solid long-term performance.
In this gallery we revisit the managers featured in the Performance Clinic in the first six months of the year, and see whether they've managed to turn their funds around.
Graphs show fund returns since the manager featured in the magazine.
Peter Kirkman, JP Morgan
Sector: Global Equities
Peter Kirkman featured in February's Performance Clinic after his once-impeccable track record took a beating in 2011; at its worst point the JPM Global Consumer Trends fund was down some 20%, 8% more than the market.
Kirkman put the disappointing result for 2011 down to a mis-timed move into China. Having doubled his emerging market exposure after the big inflation-induced sell-off in Q1 2011, he was particularly vulnerable to the second bout of panic about a possible 'hard landing' which followed in September.
So how has the fund fared since? Having tracked the performance of the FTSE World index closely in the early part of the year, it started to fall behind in May, gaining 5.81% since February compared with the benchmark's 10.93% rise.
Kirkman's heavy exposure to China means continued volatility looks likely, but the logic of the emerging consumption story is difficult to ignore long term.
Bruno Crastes, H2O Asset Management
Sector: Bond Global
Fund: H2O Multibonds IE
H2O Asset Management co-founder Bruno Crastes paid a visit to our Performance Clinic in March after his flagship MultiBonds fund took a kicking while the fate of the eurozone hung in the balance. It lost 8% in 2011, underperforming the JPM Government Bond Index Broad index by some 18%.
Crastes put the underperformance down to European leaders' slow response to the crisis in the region, leading to liquidity drying up while the bureaucrats twiddled their thumbs.
'When you owned Greek debt, it was very difficult to perform in 2011, and you didn’t need to have a lot,' he said.
However, Mario Draghi's promise to do 'whatever it takes' to save the Euro back in July triggered a massive turnaround for the fund as fears of a disintegration of the single currency faded.
Since his visit to the clinic his benchmark has crept up 3%, while the MultiBonds fund has stormed ahead with a rise of almost 30%.
As Crastes said back in March, 'This crisis will create value for our investors the way it did in past instances.'
Scott McGlashan, J O Hambro Capital Management
Sector: Equity Japan
Fund: JOHCM Japan
April saw JOHCM manager Scott McGlashan pay a visit to our clinic with his fund following the sluggish performance of the Japanese market. However, he was optimistic that things were set to improve, saying the country was set for its biggest rally in a decade.
'In my career, there have been four or five rallies where there have been moves of 50% or more in the Japanese stock market and that’s what it feels like again to me,' he said.
The rally hasn't materialised yet, but McGlashan's funds, both euro and yen denominated versions, have solidly outperformed the benchmark's 2% return since April. If the Japanese market does take off as McGlashan expects, his recovery-focused portfolio is sure to reap the rewards.
Edwin Walczak, Vontobel
Sector: Equity North America
'What went wrong is that we held on too long to financials,' said Edwin Walczak when he took a trip to our clinic back in May. His fund has significantly outperformed the S&P 500 since it was launched back in 1991, but it's lagged over the past five years.
In May Walczak was reaping the rewards of his holdings in ‘Buffett-like franchises’ such as Nestlé, Coca Cola, Procter & Gamble and McDonald’s, and his fund outpaced the benchmark over the first half of the year. ‘It feels as if we’ve had three good years compressedinto one,’ he said at the time.
Since then, however, the fund has tracked its benchmark, returning 8.9% against the S&P 500's 9.4% rise.
Laurent Dobler, Comgest
Sector: Equity Europe
Fund: Renaissance Europe
June's Performance Clinic featured Paris-based European equity manager Laurent Dobler, whose fund was off the pace by about 10% in the two years following the 2008/09 downturn.
He followed this with a period of outperformance, and in April last year was 20% ahead of the FTSE World Europe index.
Just like Walczak, Dobler is a strong advocate of finding what Warren Buffett terms ‘franchises’. ‘You need to find a company which can combine this franchise ability with a growing market. This is the place where we try to find candidates. Over the past 10 yearswe have had de-ratings, it has been tough, this has been the death valley of the growth investors. But we have survived.’
Since Dobler's appearance in the clinic the fund has chased its benchmark, rising 20.7% since June compared with a 24.2% rise in the FTSE World Europe index.