VT Chelsea Managed Monthly Income top of its sector over five years

6 June 2022 - Exactly five years since the launch of the VT Chelsea Managed Funds, VT Chelsea Managed Monthly Income marks the anniversary at the top of its sector.

Launched on 5 June 2017 by Chelsea Financial Services, the four VT Chelsea Managed Funds were initially designed to offer Chelsea’s clients a one-stop shop to invest, as well as giving them access to the Chelsea research team’s most up-to-date investment views and fund preferences.

Darius McDermott, investment advisor to the funds commented: “For nearly two decades, clients relied upon our research and fund selection expertise, but many said they wanted us to do it for them.

“So, we created this range of managed funds, each with a different client profile (Cautious, Balanced, Aggressive and Income) and investing in different markets and assets via funds and investment trusts, all carefully selected by our expert team.”

Strong performance

As the funds mark their fifth anniversary, performance has been rewarding.

The VT Chelsea Managed Monthly Income fund is the best-performing fund in a peer group of 136, having returned 38.7%* compared with 13.3%* for the average fund in the IA Mixed Investment 20-60% Shares sector. What’s more, the fund has so far delivered more than £2,410 of income for every £10,000 invested at launch**.

The VT Chelsea Managed Cautious Growth fund, which is compared with the same sector, has returned 24.8%*.

Strong performance has also been shown by the VT Chelsea Managed Balanced Growth fund, which sits in the IA Mixed Investments 40-85% Shares sector. This fund has returned 36.3%* compared with a sector average of 22.2%* and is 17 out of 148 funds.

The VT Chelsea Managed Aggressive Growth fund, which is compared to the IA Global sector, has slightly lagged the peer group average due to its weighting to other assets as well as equities, but has still managed a respectable 40.9%* vs 48.5%* for the sector average.

The consistent performance of the funds has been noticed by the industry, with the range winning the ‘Best Mixed Asset Small Fund Family Group Over Three Years’ in the Refinitiv Lipper Fund Awards in the past two consecutive years.

How the funds are run

The team’s philosophy is to work hard for every single basis point of returns and the process is quite simple. The macro environment is considered first, funds are then selected, and the portfolio then constructed. It is monitored and modified as required.

“When considering the macro environment, we’re asking questions like: What has changed in the world? What assets or funds work in this environment? Where are valuations? What is sentiment like?” said Darius. “It’s about trying to pin-point extremes and take advantage.

“Not all the allocations have worked, like an underweight to the US, for example. And some have taken time to come to fruition: both the gold and Indian equity positions were a drag on performance for some time, before coming good in 2021. But, overall, asset allocation has added value.”

When it comes to fund selection, funds with a clear philosophy, a consistent and repeatable process, clear decision making and a willingness to embrace self-improvement are preferred. In contrast, funds that are overly complex, have little capacity, or where risk controls are not adequate are generally avoided.

“As you would expect to be the case given the background of the team, fund selection has generally been very good,” continued Darius.

“The excellent use of alternative investments in particular has been a regular contributor to performance and the team has been able to react incredibly quickly to current issues and take advantage of short-term opportunities.”

When it comes to portfolio construction, position sizes are weighted for conviction and risk and correlations are monitored closely. “Every holding should bring something different to the mix,” concluded Darius.

You can find out more about the VT Chelsea Managed funds here.

*Source: FE fundinfo, total returns in sterling, 5 June 2017 to 5 June 2022
**Source: FE fundinfo, VT Chelsea Managed Monthly Income fund, £10,0000 investment, 5 June 2017 to 5 June 2022

Valu-Trac Investment Management Limited is the authorised corporate director and investment manager of the VT Chelsea Managed Funds. Chelsea Portfolio Management Services Limited is the investment adviser for the VT Chelsea Managed Funds.

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. Darius's views are his own and do not constitute financial advice.

Published on 06/06/2022