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Citywire Ratings: 12 fund managers pulling ahead of the opposition
We highlight 12 fund managers who have gained their first Citywire performance rating or won back a rating through improved returns.
What our monthly manager ratings tell you
Citywire Fund Manager Ratings are a useful tool for investors researching which funds to put in their stocks and shares ISA or pension.
To gain one of our A, AA or top AAA ratings fund managers must invest their investors' money more effectively than their rivals over a three-year period. They don't have to deliver the highest returns but they do need to provide a better 'risk-adjusted' return. That means, deliver more return for each bit of risk they take.
In the folowing pages we highlight a dozen fund managers whose record on one fund or more has earned them a rating.
For an explanation of how the ratings work and a full list of the fund managers, look at the rated fund managers page.
Our researchers use these exclusive manager ratings as a starting point for their fund recommendations in Citywire Selection.
This month a total of 327 of the 1,865 fund managers on our database qualified for a rating, with 54 earning our top AAA rating, 74 gaining an AA rating and 199 attaining a Citywire A rating.
Jonathan Gumpel/Robin Eggar
Brooks MacDonald co-managers Jonathan Gumpel and Robin Eggar have moved up one notch to reach our highest AAA performance rating. The duo first entered the ratings last October when they received an AA rating for their performance on the IFSL Brooks Macdonald Defensive Capital fund. Since then their risk-adjusted returns have improved. By 'risk adjusted' we mean they are delivering more investment return for each bit of risk they take, not that their fund has achieved the highest return.
Over the last three yeas the Defensive Capital fund has risen by 14.9%. It invests mainly in defensive assets such as preference shares, loan notes, convertibles, structured notes and other investments with a defined return.
Global bond manager Stuart Edwards earns his first rating, an A, for his management of the Invesco Perpetual Global Bond fund. Over the past 35 months, the period for which he has received his rating, he has generated returns of 15.8%.
The fund is invested mainly in government bonds with a bias towards those issued by the US (currently 13.9% of the fund) and Germany (5%). After strong returns in these regions he now has a focus on the Canadian, Australian and European sovereign markets.
Edwards has a small position in investment grade bonds which are mainly within senior bank debt which has been made more attractive to him by the introduction of the new Basel III rules aimed at strengthening banks' capital reserves.
UK equities manager Stephen Anness enters for the first time with a Citywire A rating for his three-year, risk-adjusted performance on the Invesco Perpetual UK Aggressive fund. Over this time the fund has risen 32.8%, in comparison to his benchmark, the FTSE All-Share, which rose just over 24%.
Recently he has had more than half the portfolio invested in the industrials and consumer services sectors, with Rentokil Initial (9.5%) and Dixons Retail (6%) his biggest stocks. He remains cautious about the prospects for the UK stock market this year because of the recession in the eurozone.
Ruth Keattch/Derek Stuart
Co-managers of the Artemis UK Special Situations fund,Ruth Keattch and Derek Stuart both enter the ratings this month with an A for their performance. This is the first time Keattch has received a Citywire rating, while veteran Stuart has regained his after a 16-month absence.
Over the last three years the fund, whose top holdings feed into our Citywire Top Stocks list, has generated a 29.5% return for investors. At the end of November the main sector investments were in industrial goods and services (18.7%) and the oil and gas sector (14.8%).
Nick Hayes gains his first Citywire rating, an A for his 30-month, risk-adjusted performance on the AXA Sterling Strategic Bond fund, which has generated a total return of 23.85% in that time. The flexible remit of the fund gives him a lot of flexibility in what bonds to invest in, although at the end of December his top 10 holdings were all gilts (UK government bonds). Gilts make up half the portfolio with slightly more than 35% invested in corporate bonds issued by UK companies.
With investors' thoughts turning to when the post-crisis era of ultra-low borrowing costs might end, Hayes has taken steps to reduce the fund's exposure to rising interest rates, which will see bond prices fall. He is also looking to reduce his weighting to corporate bonds which have become a bit expensive.
Invesco Perpetual manager Ciaran Mallon gains his first top Citywire AAA rating this month on the back of his performance on the Invesco Perpetual Income Growth fund. Over three years the fund has risen 34.76% compared to the FTSE 350 Higher Yield index, which rose by 21.26% over the same period.
At the end of November his biggest stock holdings continued to be in tobacco, a sector on which the Invesco Perpetual team have long been positive. Other sectors favoured by Mallon include consumer services (22.34%) and industrials (15.63%).
Henderson’s Neil Hermon, manager of the Henderson UK Smaller Companies fund, moves up one notch in the ratings and as a result receives his very first AAA rating for his three-year risk adjusted performance. At the end of December his top holdings were Spectris (3.4%), a supplier of precision instrumentation and controls, and Informa (3.0%) a publishing and conference company.
The positive performance within the fund came from the conference and exhibition organiser, ITE, which rose by a healthy 26.1% on the back of strong full results being reported and a positive outlook for future earnings. The commercial vehicle rental company, Northgate, also rose 21% as the company reported good interim results and made reference to re-financing its debt structure which could boost profitability.
However, the main detractors came from Hyder Consulting, an advisory and design consultancy company, which fell as profits were taken by investors after a good run.
A new position was taken in the mobile payments company Monitise.
Premier Asset Management fund manager Chris Wright grabs his first Citywire A-rating for his three-year, risk-adjusted performance on both the Premier Ethical and Premier European Optimum (see next page) funds. Premier Ethical invests in businesses it believes are based on ethical or socially responsible principles. It avoids companies that are known to have a negative social or environmental impact.
Chris Wright (cont)
Premier European Optimum has achieved a total return of 13.7% over the past three years, handsomely outperforming its LCI FTSE All-Share/FTSE World-Eur excluding UK (50:50) benchmark, which rose by 3.53%. The fund performed well until November 2012, when it suffered as a number of big more defensive stocks in the FTSE 100 such as Vodafone, Glaxo, BP and Royal Dutch Shell missed out on the end-of-year rally. On the plus side, his positions in insurers RSA and Allianz did well as did larger 'cyclical' European companies more exposed to worldwide economic growth.
Global equities manager Vipin Ahuja enters for the first time with a AA-rating for his 30-month, risk-adjusted performance on the Allianz Global EcoTrends fund. His main investment focus is within the eco-energy, pollution control and clean water sectors. At the end of December his top holdings included US-based Polypore International, a filtration company that develops, manufactures and markets specialised polymer-based microporous membranes (5.33%) and EDP Renovoveis, a renewable energy company based in Madrid (3.78%).
Geographically he has more than 58% invested in the US and around 7% within the UK.
Schroders manager Thomas See enters for the first time with an A-rating for his three-year, risk-adjusted performance over the Schroder Income Maximiser, Schroder Asian Income Maximiser and the Schroder ISF Global Dividend Maximiser funds. The largest of these is the £820 million Schroder Income Maximiser fund which has delivered a return of just over 23% in that time.
His main holdings at the end of December were AstraZeneca (6.0%) and Lloyds Banking Group (5.0%) with the main sector allocations in financials (29.4%) and consumer services (19.7%).