Festive 15: the fund managers lighting up our ratings
Despite all the uncertainty in the markets, managers have been finding alpha and we have seen good levels of risk adjusted performance from them over the past few months. This month, we have awarded 328 managers with a rating for delivering strong three-year risk-adjusted performance.
Aaron Barnfather/ Barnaby Wilson
Aaron Barnfather and Barnaby Wilson enter with a A rating for their three year risk adjusted performance on the Lazard European Alpha fund. At the end of October he held 62 stocks in his portfolio and his top holdings included Novartis (6.0%) and Sanofi (5.4%) His main investments geographically were in France (21.9%) and Germany (15.8%).
At the end of October the main contributors to performance in the fund were Sky Deutschland and an overweight position in CGG Veritas. However having overweight positions in Intesa Sanpaolo and Cristian Dior did not help their portfolio returns.
Over the last three years they have generated returns of 10.52% in the fund. In comparison their benchmark, the FTSE World Europe ex UK TR GBP, returned 6.97% over the same time period.
Christopher Lees/ Nudgem Richyal
Christopher Lees and Nudgem Richyal from J O Hambro enter with a A rating for their three year risk adjusted performance on the JOHCM Global Select Retail GBP fund. Over this time they have generated returns of 35.95% in the fund.
The fund has a global remit and during October most of their stock picks reported good results. However the main detractors were within the technology sector where they are overweight, which was the worst performing sector with holdings in Apple, Google and Checkpoint suffering.
Checkpoint is seemingly in the beginning stages of structural decline in market share and as a result the duo have recently sold the stock.
Another disappointment for the managers was Softbank, a Japanese telecommunications and Internet corporation, which fell more than 30% on its surprise acquisition of Sprint in the US. However the stock is recovering and has just reported good results and therefore the duo is sticking with the stock.
Ben Lofthouse enters with an A rating for his 30 month risk adjusted performance on the Henderson Global Equity Income A Inc fund. At the end of November, his top holdings were Pfizer (3.1%) and BASF (3.1%).
The fund’s holdings in
Standard Life and Prudential aided returns which were benefitted by a positive market backdrop. The life insurers have recently announced good trading statements which should enable good cash flow generation and help continue their dividend growth.
Their position in BASF was also a strong contributor as the company announced good quarterly results and continues to demonstrate its resilience in the challenging economic environment.
However, the main detractors were Microsoft, which looked weak after industry data revealed poor global PC sales trends. Another detractor was NYSE which reported disappointing third quarter earnings.
Roderick Snell is the manager of the Baillie Gifford Pacific A Acc fund and his risk adjusted performance on the fund over the last three years has helped his gain his first Citywire A rating. The fund is positioned as a long term Asian Growth fund and over this time he has posted returns of 23.87%, in comparison to his benchmark, the FTSE AW Asia Pacific ex Japan TR GBP, which has posted 17.65% over the same time.
He invests mainly in equities in the Far East, Australasia and the Indian sub-continent. His portfolio typically holds 50-80 stocks with a low turnover rate. At the end of October his main geographical weighting was South Korea (23.5%), China (17.1%) and Taiwan which he held at 12%. His top holdings comprised of Samsung Electronics (7.8%) and TSMC (4.0%).
Takis Anastassopoulos has entered with a A rating for his three year risk adjusted performance on the Insight Investment UK Equity Income Booster A Acc fund. He started co-managing the fund in 2009 alongside Timothy Rees who is also A rated this month.
Over the last few months, the fund has delivered an attractive level of income with a number of positions performing well. One of these positions was
. His large underweight position in BG Group was also beneficial to his portfolio as the company fell sharply over the month as it lowered its future earnings potential. Having an underweight position in relation to the benchmark was very beneficial to him. He increased his position in the paper manufacturer DS Smith in October.
At the end of October his top holdings comprised
Royal Dutch Shell (6.8%) and BP (6.0%) and his main sector weightings were in the financials sector at 22.8% and within the consumer services sector with a 14.2% holding.
Richard Watts enters with an A rating and manages the Old Mutual UK Select Cap fund and the Skandia UK Opportunities fund.
In October within the Old Mutual UK Select Cap fund, his sector allocation detracted from performance but stock selection was the driver of outperformance versus the benchmark. His underweight stance over the last months in the mining sector compared to his benchmark, added value and was beneficial to his portfolio. However his overweight position in software and the oil services sector was a detractor.
He has increased house building exposure in the month and increased his position in
Persimmon at the expense of his position in Bellway which he sold in October. Top holdings were Ashtead group, a a British industrial equipment rental company (3.8%) and Telecity Group PLC, a European carrier-neutral datacentre and Colocation centre provider company, (3.3%).
Raphael Muller manages the Hermes Global Investment Grade fund and for his three year risk adjusted performance on the fund he has entered the ratings for the first time with a A rating. He has generated returns of 17.95% in the fund over the last three years. In comparison his benchmark, the BofA Merrill Lynch Glo Brd Mkt Co xSub Fin TR EURH, has returned 15.57% over the same time.
The fund invests primarily in a diversified portfolio of investment grade bonds. At the end of October his top holdings in the fund were Citigroup (3.13%) and Societe Generale (2.14%).
4. Moz Afzal/Andy Seaman
Moz Afzal of EFG Asset Management and Andy Seaman Stratton Street enter for the first time with A ratings based on their three year risk adjusted performance on the New Capital Wealthy Nations Bond fund. Over the last three years they have generated returns of 40.55%. Their main geographical investments at the end of October were in Asia Pacific at 12.89% and Central and western Asia at 18.29%.
During October the majority of the fund’s holdings moved up in price, as a result of yields falling further and spreads to government bond markets continued to contract. One of their best performing bonds was Russian Railways 7.847%, which is a state owned provider of rail services in the Russian market. As a quasi-sovereign credit it has full state support and is seen as a strategic asset by the state. They bought Nippon Life Insurance 5% 2042 which is Japans largest traditional life insurer with good liquidity and financial flexibility.
Performing well in their portfolio was Rasgas 6.332% 2027 which gained 7.25 points and Nakilat 6.267% 2033 which was also up by 7.22 points over the month.
Adam Walker enters with a AA rating for his three year risk adjusted performance on the Ignis Corporate Bond fund which he co manages with Chris Bowie.
Over recent months the duo has reduced exposure to high beta names and have increased the funds weighting into short dated gilts and into cash. As the woes of the markets across the globe continue to dominate investor sentiment, they remain defensive and are only taking risk in the more established names in the market.
At the end of October they had 39.6% invested in non-financials and more than 25% within financials. BBB rated bonds were favoured and make up more than 46% of the portfolio and their top holdings were
Ignis Sterling Liquidity 1 (4.54%) and United Kingdom (Government of) 4.5% (2.19%).
Torcail Stewart enters with a AAA rating for his 30 month risk adjusted performance on the Baillie Gifford Corporate Bond fund. He co- manages the fund alongside Stephen Rodger and over the last 30 months he has returned 36.19% on this fund against his Citywire benchmark, the Markit iBoxx Sterling Corporates TR which returned 26.2% over the same period.
They invest across high yield and investment grade markets and have exposure of typically between 40-60 companies. At the end of October their main holdings were Telereal (B-4) 6.1645% 2031 (3.5%) and IBRD 5.4% 2021 (3.4%).
The highest entrant is
Bruce Olsen (Wells Fargo) who enters with a AAA rating for his three year risk adjusted performance on the Wells Fargo (LUX) WW US All Cap Growth fund. He co-manages this fund alongside Thomas Ognar who is also AAA rated. Over the past three years they have generated returns of 71.75% on the fund. In comparison, their Citywire assigned benchmark; the Russell 3000 Growth TR has returned 46.47% over the same time period.
Their top holdings at the end of October were Apple Inc (7.34%) and eBay Inc (3.62%). Main sector weightings were in information technology and consumer discretionary which he held at 36.97% and 22.59% respectively.