Our bi-annual review of Citywire Selection has now taken place. By looking to the track records of individual fund managers and through our in-house analysis, we have added eight funds and removed seven.
The announcement of the soft closure of BlackRock European Dynamic run by Alister Hibbert means we have removed the fund and promoted BlackRock Continental European to the full list.
Run by Vincent Devlin, who with Hibbert made the switch from Swip to BlackRock in 2008, this is less aggressive than Dynamic, tending to focus on large and mid caps with more diversification. Devlin has generated strong risk adjusted performance in the sector with his track record of more than a decade.
Another soft closure, First State Global Emerging Markets Leaders, has prompted us to swap the fund with Fidelity Emerging Markets managed by Nick Price (below).
We have also made decisions on funds which were placed under review half way through last year. We were looking for a turnaround and in some cases this has not materialised and our process indicates they do not warrant a place in Citywire Selection.
This is the case for Smith & Williamson North American Trust, Threadneedle UK Property Trust, Artemis Alpha Trust and Threadneedle UK Mid 250. The latter also saw a change of manager at the end of 2013, with Simon Haines passing the reins on to James Thorne and Matt Evans.
Given that a change in manager is a trigger for us to assess a fund’s inclusion, we have had to remove Fidelity Special Situations. We stuck by Sanjeev Shah during a period of underperformance as he was staying true to his style and he reaped the rewards, outperforming during his tenure.
Alex Wright took over on 1 January and holds the top AAA rating from Citywire. But given that his track record has been in the UK Smaller Companies sector, we are unable to import this into the UK All Companies space.
In light of these changes we have shored up these gaps and also bolstered other areas with the following additions:
· BlackRock UK Special Situations (Richard Plackett and Roland Arnold)
Richard Plackett has been instrumental in building a near decade-long track record in the sector, with Roland Arnold acting as co-manager since August 2012. Plackett has just announced that he will be taking a six-month sabbatical and we are assessing the continuity with Arnold solely at the helm.
· Jupiter Strategic Bond (Ariel Bezalel)
The skill of the manager is important in a strategic bond fund as they look to identify market opportunities and adjust the portfolio as sentiment changes. Bezalel has proved shrewd in this regard. He is currently insulating the portfolio from an increasing interest rate environment while also looking to generate income.
· Legal & General UK Property (Michael Barrie and Matt Jarvis)
The fund invests in bricks and mortar and the managers have generated strong risk adjusted returns. Around a quarter of the fund is held in cash as a buffer, 10% is invested in central London, with the remainder spread around the UK in areas that are deemed to be on the up.
· Phoenix Hawksmoor Vanbrugh (Richard Scott and Daniel Lockyer)
Scott and Lockyer have consistently demonstrated an ability to asset allocate shrewdly in tough conditions, effectively articulating a clear macroeconomic view. They also take a keen interest in investment trusts, exploiting the discounts available in unloved areas.
· Rathbone Global Opportunities (James Thomson)
James Thomson invests in companies from around the world that he sees as undiscovered growth stories. He uses a high conviction approach to stock picking and this process has led to a strong long term outperformance record on the fund with stock selection driving performance.
· Royal London UK Equity Income (Martin Cholwill)
Martin Cholwill has delivered consistently strong outperformance over the long term. His strict investment approach screens companies for cash flow, a sustainable dividend and whether the dividend can grow. This pick comes with higher risk than most other picks in the sector due to the larger than average mid-cap exposure and in return carries a 3.5% yield.
You can view the full Citywire Selection list here.