When it comes to our investments it’s often tempting to pick the most popular option – after all, if a fund has billions of assets under management, it must be doing something right.
But this strategy can lead to us missing out on other smaller, but no less rewarding, choices. Here, we highlight five funds, each with £100m or less assets under management, and top quartile performance.
Top quartile in its sector over one, three, five and ten years*, in terms of performance, this Core Selection fund offers a focused, high conviction portfolio of quality growth European equities. It has no constraints on regional or country allocations and its manager believes it’s important to avoid short-term noise and focus on a 5-10 year time horizon. He has considerable experience of investing in this way and a strong track record. Over the past 12 months it has returned 21.8%*.
The manager of this global equity fund will actively avoid businesses involved in unethical or unsustainable practices. The exclusion criteria are alcohol, animal testing, armaments, extraction of fossil fuels, gambling, nuclear power, pornography, tobacco and poor employment, environment and/or human rights practices. Each holding will also have at least one positive environmental, social or governance attribute. It is top quartile since launch in 2018** and over one year*. Over the past 12 months it has returned 25.6%*.
This is an unconstrained, concentrated global high yield bond fund, which is in the Chelsea Selection, was launched in 2019. The manager is very experienced and, over his career, has an excellent track record in navigating the extra risk in the sector whilst achieving above average returns. His experience and the fund’s flexibility to also short some positions allows him to find opportunities others may miss or avoid. It is top quartile in its peer group since launch^ and over one year*. Over the past 12 months it has returned 18.9%*.
The manager of this fund likes to find a bargain and, over his career, has proven himself very able to do so. He invests in UK companies of all sizes but will typically have more of a focus on medium and smaller companies than many of his peers. In addition, there will be some FTSE 100 names and a few carefully chosen AIM-listed companies in a concentrated portfolio of around 40 holdings. Since launch in September 2018^^ and over one year* it is top quartile in its sector. Over the past 12 months it has returned 34.3%*.
And last, but by no means least, is our very own VT Chelsea Managed Balanced Growth. The Chelsea research team are investment advisors to this multi-asset, multi-manager fund, which launched in 2017, along with three others in the range. Sitting in the IA Mixed Investment 40-85% Shares sector, it is top quartile in performance terms over one and three years*. It currently has around 56% invested in equity funds, with the rest spread across fixed income, property, alternatives, absolute return and precious metals^^^. Over the past 12 months it has returned 14.6%*.
*Source: FE fundinfo, total returns in sterling to 5 March 2021
** Source: FE fundinfo, total returns in sterling, 19 July 2018 to 7 March 2021
^ Source: FE fundinfo, total returns in sterling, 6 June 2019 to 7 March 2021
^^ Source: FE fundinfo, total returns in sterling, 1 October 2018 to 7 March 2021
^^^Source: fund factsheet, December 2020
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views expressed are those of the author and do not constitute financial advice.