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New Year cheer: 10 managers starting 2018 on a high

We highlight 10 fund managers rising up the Citywire ratings and starting the year on the front foot.

Achieving a Citywire rating is no easy feat.

Fewer than 25% of the fund managers that we track typically achieve a +, A, AA, or AAA rating. These are awarded on a quantitative basis if a manager beats their benchmark over a three-year period. The Citywire manager ratio lies at the core of our analysis, taking into account the fund manager’s risk-adjusted performance.

The AAA rating goes to the top 10% of managers in this elite group, while the next 20% receive AA and the following 30% get an A rating. The remaining 40% are + rated.

Click through to find out more about the managers climbing the Citywire ratings this month by delivering stellar returns for their investors.

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Achieving a Citywire rating is no easy feat.

Fewer than 25% of the fund managers that we track typically achieve a +, A, AA, or AAA rating. These are awarded on a quantitative basis if a manager beats their benchmark over a three-year period. The Citywire manager ratio lies at the core of our analysis, taking into account the fund manager’s risk-adjusted performance.

The AAA rating goes to the top 10% of managers in this elite group, while the next 20% receive AA and the following 30% get an A rating. The remaining 40% are + rated.

Click through to find out more about the managers climbing the Citywire ratings this month by delivering stellar returns for their investors.

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Please sign in or register to comment. It is free to register and only takes a minute or two.

Hideo Shiozumi

Legg Mason IF Japan Equity manager Hideo Shiozumi has regained an AAA rating this month.

The manager of the £852 million fund moved up to an AAA rating, having been AA-rated for the previous nine months.

This fund has a volatile track record, recording the second largest peak to trough loss of 39% over the past decade. Nevertheless, patient investors have been rewarded. Over the three years to the end of December, the fund has returned an impressive 160.9%. This is more than double the 69.9% achieved by the average fund in the Japan sector average.

Over five years, the fund is up 321.1% versus the sector average of 114.9%.

The portfolio holds between 25 and 60 stocks and currently has around 80% in long term core holdings. Shiozumi uses the remaining 20% to make shorter term tactical investments.

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Matthew Brett

Matthew Brett represents another fund manager who has moved up the Citywire ratings, receiving an AA this month.

He manages the Baillie Gifford Japanese and Japanese Income Growth funds.

Over the past four years he has consistently appeared in the Citywire ratings – with the exception of two months. This January he moved from an A to AA rating, which represents the sixteenth month he has achieved this accolade since January 2014.

He co-manages the Baillie Gifford Japanese fund with AA-rated Sarah Whitley, and has returned 84.9% over the three years to January. This compares to 68.8% by the average fund in the Investment Association’s Japan sector. Over five years the fund is up 161.8%, far ahead of 114.9% by the sector average.

Meanwhile, the Baillie Gifford Japanese Income Growth fund has returned 20.3% over the past year versus 18.5% by the Japan sector.

Launched in 2016, this fund focuses on Japanese companies that are growing their dividends. Brett and co-manager Karen See stand to benefit from reforms that have encouraged companies to become more shareholder-friendly by paying out dividends or buying back shares.

The poetically titled ‘man and machinery’ represents the largest sector exposure across both funds.

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Martin Reeves

Legal & General High Income manager Martin Reeves has earned his first AA rating this month.

His Legal & General High Income fund has delivered a 23.6% return over the three years to the end of December. This compares to 17.3% by the Bonds – Global High Yield sector.

The fund has an overweight in B-rated bonds in order to take advantage of what Reeves describes as supportive macro-economic conditions. The fund manager remains positive on the portfolio’s allocation to emerging market bonds, where he believes the best opportunities lie.

He points to low financing costs, moderate corporate leverage, steady global growth, and a cautious approach to the tightening of monetary policy by central banks. Collectively, these provide a supportive backdrop for high yield bond funds.

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Ben Edwards

BlackRock’s Ben Edwards was awarded his first AA rating in January, marking the tenth consecutive month that he has received a Citywire rating.

He manages four funds for the group: the BlackRock Corporate Bond, IBF Over 10 Years Corporate Bond, IBF All Stocks Corporate Bond and the Sterling Strategic Bond.

Across all four, he has achieved an average return of 21.3% over the three years to January. This compares to 14.9% by the average manager in the Bonds – Sterling Corporate Bond sector.

Within the £568 million BlackRock Corporate Bond fund, he retains a preference for UK bonds, and expects the Brexit negotiations will prove benign for the asset class.

‘There’s a number of factors that are not Armageddon or doomsday scenarios, but it does seem like there is a softer outlook at best, which actually works well for bonds, if inflation doesn’t shoot up,’ he told Citywire.

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Eytan Shapiro

JPMorgan’s Eytan Shapiro has earned his first AA rating in 10 years, following impressive 12-month performance numbers.

He was A-rated for the previous five months for his risk-adjusted performance with the JPM US Small Cap Growth and US Smaller Companies funds, which he runs alongside Timothy Parton.

His £110 million JPM US Smaller Companies fund has returned 65.1% over the three years to January, outpacing 51.1% by the US Small & Medium Companies sector. Over the past 12 months, performance has been particularly impressive: the fund is up 27.3% versus 7.1% by the sector average.

Technology is the top sector weighting at 23%, followed by healthcare at 20%. At a stock level, John Bean Technologies – which develops food processing and air transportation technology – is the top holding at 2%.

Meanwhile, the JPM US Small Cap Growth fund returned an impressive 27.8% over the past year.

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William Lam

Invesco Perpetual’s William Lam has moved up to an AA rating this month.

This is the first time that the fund manager has received this accolade, having held an A rating for eight out of 12 months last year.

Lam runs the £1.8 billion Invesco Perpetual Asian fund and looks after the Asia Pacific region of the £310 million Invesco Perpetual Pacific fund alongside Tony Roberts (who deals with Japan) and Stuart Parks (who is responsible for asset allocation). The trio also run the Invesco Pacific Equity fund.

Across all three he has achieved an average return of 65.2% over the three years to the end of December. This compares to 59.3% by the average fund in the Equity – Asia Pacific Including Japan sector.

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Johan du Preez

M&G’s Japan specialist Johan du Preez has regained his AA-rating after seven months.

He manages the M&G Japan and Japan Smaller Companies funds.

Du Preez started running the funds in September 2015, with his Citywire ratings record also factoring in the tail-end of his time running the Eastspring Investments Japan Fundamental Value fund up until April 2015.

The former has enjoyed a strong three years in performance terms, up 77.9% over the three years to the end of December. This compares to 68.8% by the average fund in the Japan sector.

Meanwhile, the M&G Japan Smaller Companies fund has returned 92.9% over the same time period. This compares to 99.2% by the average fund in the Japanese Small & Medium Companies sector.

Du Preez focuses on companies where the share price does not fully value a company’s ‘sustainable earnings over the medium to long-term’. Both portfolios typically hold between 30 and 50 stocks. 

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Paul Niven

BMO Global Asset Management’s Paul Niven has been rewarded for his risk-adjusted performance with the F&C Managed Growth fund in January’s ratings.

He gained a AA rating in January, having been A-rated for the previous two months.

Over the three years to January, he has returned 35.1% with the Managed Growth fund. This compares to 25.5% by the average fund in Citywire’s Mixed Assets – Flexible sector. Over five years the fund is up 64.1%, ahead of 49.8% by the sector average.

Niven has run the Managed Growth fund since 2010. It is a multi-manager fund which invests predominantly in other funds run by BMO, previously F&C Investments.

Niven also runs Foreign & Colonial (FRCL), one of the oldest investment trusts in the UK. He replaced Jeremy Tigue as manager in 2014.

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Emery Brewer and Ivo Kovachev

JO Hambro Capital Management’s Emery Brewer and Ivo Kovachev moved up the Citywire ratings in January, proving that their emerging markets fund can hold its own against larger peers.

The managers of the £28 million JOHCM Emerging Markets fund jumped from a + to AAA rating in January on the back of their risk-adjusted performance.

The fund, which has a bias towards small and mid-caps, has delivered a 49.7% return over the three years to the end of December. This compares to 46.1% by the average fund in the Global Emerging Markets sector.

The biggest performance driver in December was the duo’s decision to avoid scandal-hit South African retailer Steinhoff.

‘Avoiding catastrophes like that is always important to performance,’ they noted.

The duo continues to monitor the dollar closely, suggesting that it could be due a rebound. If this happens, they suggest a moderate market correction could be on the cards.

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Profile: Kevin Doran's formula for success at AJ Bell

Profile: Kevin Doran's formula for success at AJ Bell

From a degree in theoretical physics to teaching and becoming one of the youngest chief investment officers in the UK, Kevin Doran has certainly had an interesting career.

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