BLOG: McDermott’s ‘Olympian’ fund managers
Some pointers for your next pub quiz. Among a raft of other trivia, we’ve also found a few fund managers we think could compete.
Like our Olympic athletes, these managers have years of training and experience that take them to the top, and the track records to prove it. Here are our favourites for some of the key events.
The 100m race
Before the likes of Carl Lewis and Usain Bolt were household names, they were little-known contenders for what is arguably one of the most desirable podium finishes in the games. So who might be the superstars of tomorrow in the world of fund management?
Rathbone Global Opportunities, James Thomson
An experienced manager who somehow seems to stay under the radar, James Thomson sticks to what he does best, which is finding early or out-of-favour opportunities in global growth companies. Like the best Olympic runners, James makes a point of constantly honing his strategy and learning from past performance. For example, the fund changed its approach in 2008, adding a bucket of core defensive stocks to its growth-focused companies. This approach has since proven the value of James’s foresight, as the fund has fallen less than the market in subsequent tumbles.
Some fund managers excel at the long haul, having been in the game themselves for several decades and having protected and grown investors’ money sustainably across a number of market cycles.
EdenTree Amity UK, Sue Round
Sue Round has managed this fund for nearly 30 years, making it the longest established ethical fund in the UK. She invests for the long-term with a strong focus on medium and smaller-sized companies, which makes the fund very different from its peers. Responsible investing is a key factor in decision making, with any potential investment having to pass through a rigorous multi-factor screening process before going into the fund.
In this low interest rate environment, many investors are seeking managers who can make their fund’s yields soar, delivering a consistent high yield.
Fidelity Enhanced Income, Michael Clark and David Jehan
This fund produces an income that has been consistently above 6% per annum, well in excess of the market. Michael and David focus on dividend-paying, large-cap UK companies that they believe can also grow their dividends sustainably. And just like supreme athletes have specialist techniques for getting them above the bar, these managers stand out form the competition for their use of investment strategies including ‘covered calls’, which are designed to boost the income that can be earned on they stocks they hold.
Given the volatility we’ve seen this year, investors are also increasingly looking to achieve steady performance throughout market ups and downs. Fund managers that target an absolute return, regardless of market conditions, are our pick for the bow-and-arrow sport.
Henderson UK Absolute Return, Ben Wallace and Luke Newman
Ben and Luke aim to hit the bull’s eye every time, targeting consistent 10% returns per annum. The use a two-pronged approach, identifying stocks that will either exceed or fall short of analysts’ expectations. So their portfolio includes long (profit when price goes up) and short (profit when price goes down) positions. Unlike many of its sector peers, the fund has achieved its stated aim, which is to provide equity-like performance, but with one third the volatility.
Darius McDermott is managing director of Chelsea Financial Services and FundCalibre