Citywire Selection, our guide to the best investment ideas, was born in January 2010. Based on our long term analysis of fund manager performance, rather than that of funds, we believe this extra insight through our independent assessment benefits investors.
The results below speak for themselves.
Year-on-year, our Citywire Selection picks (in red) have had greater outperformance than the universe of IMA funds (in blue).
We monitor the 110 constituents on an on-going basis and for the active picks we look to ensure our expectations of the managers are being fulfilled. At times we make changes, most notably when a manager leaves.
Meanwhile if there has been a period of underperformance, we look to understand how this fits in with the process and our forward looking view of the manager.
Formal reviews take place bi-annually and over recent months we have been re-assessing each constituent. We have decided to place two funds Under Review, add one and remove three.
When a fund is Under Review it retains its place on our list, but our expectations are not being met and we monitor the situation over the subsequent six months.
The Investec Global Bond fund is run by John Stopford and performance has started to slip over the last few years. More recent performance has been held back by being overweight the US dollar, which has weakened, and an underweight to peripheral European bonds which have rallied strongly.
Stopford believes these two parts of the markets are at their respective peaks and is expecting a turnaround which will boost performance.
Dobell has stuck to his recovery way of investing but the bounceback we were looking for from a manager we regard highly has not manifested itself.
We felt the market rotation in April would be a positive catalyst but this has yet to come to fruition. There has also been little merger and acquisition activity in the portfolio which in the past has boosted returns. We will be watching developments closely.
We originally removed the Schroder UK Alpha Plus fund in April 2013 following the announcement that Buxton was leaving Schroders. More than a year on and with the team fully settled we believe Buxton’s long term track record warrants re-inclusion.
Three funds removed
Funds that have been removed are all due to manager changes.
Meanwhile the decision of BlackRock’s Richard Plackett to take a six month sabbatical has also seen us remove the BlackRock UK Special Situations fund.
Plackett has been lead manager since 2004 and is due back in October 2014. In the meantime, co-manager Roland Arnold has taken the reins. We are awaiting further information on Plackett’s future involvement on the fund.
We have followed David Jane’s track record as we stitch together fund manager performance, but under Martin Gray we knew this was one of the best multi asset funds for protecting money in downturns. On a forward looking basis this key feature is now less apparent.
You can view the complete Citywire Selection list by following this link.