Citywire Ratings: 11 fund managers outperforming in top gear
The fund managers powering ahead
This month just under 15%, or 275, of the 1,897 managers on our database qualified for a rating, with 42 earning our top AAA rating, 70 gaining an AA rating and 163 attaining a Citywire A rating.
Percival Stanion enters the ratings for the first time with an A rating for his three-year risk-adjusted performance on the Baring Dynamic Asset Allocation fund. The fund is a mixed-asset fund, and Stanion aims to achieve an absolute return of 4% in excess of cash based on the three month sterling Libor, which is the rate at which banks lend to one another. 'Risk adjusted' means we reward managers who deliver better returns than rivals who have taken a similar level of risk. Over the past three years he has returned 20.43% with the fund.
Over the past quarter, Stanion did not participate in the equity rally that took place and had minimal exposure to Europe and Asia, which were the two strongest markets. The biggest performance contributors to his portfolio came from UK equities, which earned 70 basis points. Within his bond holdings, the UK contributed 40 basis points and his holding in gold also helped bolster the returns in his portfolio. The main detractors in his portfolio were overseas bonds, due mainly to the poor returns from US long bonds, which sold off rapidly as tension in Europe eased.
The strongest individual stock performances came from his holdings in Source Physical Markets Secured Gold-linked Notes and the iShares S&P 500 USD exchange-traded fund. At the end of September these stocks claimed a place in his top-10 holdings, with weightings of 6.3% and 3.8% respectively.
James Wilkinson/Marcus Phayre-Mudge
James Wilkinson and Marcus Phayre-Mudge enter the ratings with an A rating for their 30-month risk-adjusted performance on the Thames River Real Estate Securities fund. The fund has a focus on investing in long-bias Ucits Pan-European real estate securities.
At the end of the last quarter his main investment holdings were in the UK and France, making up more than half of his portfolio. His top holdings were France-based property investor Unibail-Rodamco (9.9%) and real estate investment trust (Reit)
Land Securities Group (9.8%). His main sector investments were in retail (38.0%) and offices (37.4%).
The duo are bullish on the UK property market especially within central London. It remains a rarity in European real Estate as it is showing good rental growth across all its subsectors.
Over the last quarter, outstanding share price performances came from overweight positions in
Unite, the student housing specialist; London-focused developer Quintain; and regeneration specialist St Modwen.
Diana Radu/Sophie Sentilhes
Diana Radu and Sophie Sentilhes enter the ratings for the first time with an A rating. They co-manage the HSBC Monthly Income fund, and over the past 33 months they have generated returns of 23.87% in the fund.
At the end of October they had 169 holdings in their portfolio and their top holdings included the company they work for,
HSBC Holdings (4.9%), and oil and gas company BP (3.9%).
On a sector allocation basis they hold 68% in UK equities, 9.2% in UK gilts and around 8.9% in international bonds.
Zak Summerscale/Jill Fields
A new group to enter the ratings is Babson Capital.
Zak Summerscale and Jill Fields enter with A ratings for their 30-month risk-adjusted performance on the St James's Place International Corporate Bond fund.
Over this time they have generated returns of 20.43% in the fund.
They principally invest in a portfolio of corporate debt securities with a focus on senior secured North American high yield with some investments in senior secured European high yield.
Over the past quarter, several European and US existing holdings continued to post high gains contributing to the overall strong performance. One of their top-10 positions, Kion, a German fork lift truck manufacturer, performed very well and advanced sharply on the back of the announcement of a strategic partnership with the Chinese firm Weichai Power.
At the end of September asset allocation was leaning towards high-yield B-rated bonds, which made up more than 60% of the portfolio.
Chris Watt enters with his first rating, and has achieved an A rating for his three-year risk adjusted performance on the Jupiter Responsible Income fund.
The fund has a focus on companies with sound balance sheets and defensible market positions. He avoids investing in companies that derive more than 10% of their turnover from nuclear power, tobacco and armaments.
His top holdings at the end October were pharmaceutical giant
GlaxoSmithKline (5.96%) and telecoms firm Vodafone (5.21%), and his top sector-based investments were industrials (21.42%) and financials (15.35%). Watt takes a long-term, bottom-up approach to investing.
Nomura Asset Management’s Japanese equities manager Kentaro Takayanagi enters for the first time with an A rating.
He manages the Nomura Funds Ireland-Japan Strategic Value fund, and over recent months the fund has benefited from overweight positions in mining company Simitomo Metal Mining and telecommunications company NTT.
However, overweight positions in car components manufacturer Denson Corp, cable maker Sumitomo Electric Industries and Sumitomo Electric were all detractors within the portfolio. This was not a huge surprise, as the electrical appliances sector was a laggard over the past months.
The defensive sectors within his fund continue to perform relatively strongly, as do the foods and the information and communications sectors, which have also outperformed the wider market.
Gareth Isaac has gone up a notch in the ratings and is now AA rated for his risk-adjusted performance on the Schroder Sterling Broad Market Bond fund and from his time at GLG Partners, where he managed the GLG Core Plus Sterling Bond fund. His time over both funds in the past 31 months has been used to calculate his rating and stitched together.
Over the past 30 months he has outperformed the average manager in the Citywire Bonds - Global investment sector by almost 3%.
Sarah Whitley/Matthew Brett
Baillie Gifford managers
Sarah Whitley and Matthew Brett receive their first AAA rating for their three-year risk-adjusted performance on the Baillie Gifford Japanese fund.
In the past three years they have generated returns of 19.28% within the portfolio. The duo invest in a spread of 40-70 companies and at the end of September their top holdings comprised one of the largest companies in Japan, Itochu (3.7%), and Don Quijote, which runs discount stores (3.1%).
On a sector level, his main investments were within commerce and services (22.2%) and within the electricals and electronics sector (13.5%).
Christopher Lynas/Ian Kenny
Christopher Lynas and Ian Kenny have moved up two notches in the ratings this month, and in the process have received the highest accolade of a AAA rating. Their rating is attributable to their performance on the Smith & Williamson Short Dated Corporate Bond fund and the Smith & Williamson Fixed Interest Trust fund. They have posted returns of 14.57% and 30.19% respectively over the past three years.
Within the Fixed Income fund at the end of September, they shortened duration on both conventional and index-linked gilts and purchased a new 10-year GKN bond. They held BBB rated bonds at 42.5% at the end September and their top holdings were UK Treasury IL Gilt 0.625% 2029 (4.3%) and UK Treasury IL Gilt 0.75% 2034 (4.0%).
Within the Short Dated Corporate Bond fund they added to existing holdings and sold out of BT dollar bonds and initiated a position in Bayer and switched Centrica longer in Sterling.
Mark Davids/Geoff Hoare
Another duo doing well by investing in Japan are
Mark Davids and Geoff Hoare of JP Morgan, who have gone up to an AA rating for their three-year risk-adjusted performance on the JPM Japan Strategic Value fund. Over the past three years they have posted returns of 9.53% in the fund. In comparison the Topix TR index has returned 2.64%.
At the end of September his main sectors of investment were industrial materials (25.44%) and financial services (24.4%) and top holdings included car manufacturer Toyota Motor Corp (4.25%) and Japan's fourth-largest financial group, Mitsubishi UFJ Financial Group (3.67%).
Lesley Duncan of Standard Life Investments goes up one notch in the ratings this month and is now AA rated. Her rating is based on her three-year risk-adjusted performance on the Standard Life Investments UK Ethical fund. Over this period she has generated returns of 47.92% in the fund.
At the beginning of October she held 82 positions within her portfolio, and the top holdings comprised
Vodafone (4.5%) and oil and gas explorer BG Group (3.7%). On a sector level her fund composition is dominated by holdings within the industrials (23.8%) and financials (16.6%) sectors.