17th June 2015
FundCalibre awards Elite Rating to two multi-asset funds
M&G Episode Income is a multi-asset fund in the Mixed Investments 20-60% shares sector, targeting a yield of cash plus 4%. It does this by investing directly in individual stocks and bonds, whilst property exposure is gained by investing in property funds. The name “Episode” refers to those periods of time when investors' emotions cause them to act irrationally. The manager uses behavioural finance to find pockets of value and invest against the herd rather than following it.
Commenting on the fund, Juliet Schooling Latter, director of FundCalibre, said: “Team-managed funds are de rigueur these days but the Episode Multi-Asset team have two strong differentiating attributes. They constantly look for value created by investor irrationality and then take positions that reflect those views. Investing directly into stocks and bonds gives them greater liquidity within the fund, as well as keeping costs down. This fund is particularly pertinent at the moment when the search for income has lead to many investors chasing the same end game.”
SVS Church House Tenax Absolute Return Strategies is also a multi-asset fund, which invests directly in assets, rather than using the fund of funds route, but it sits in the Targeted Absolute Return sector. It targets positive returns over rolling 12-month periods and LIBOR +4% over rolling 3-year periods. It has limits on exposure to different classes, wherever possible seeking low correlation of returns between the classes and low volatility in the fund’s overall value.
Adding his thoughts on the Church House fund, Clive Hale, director of FundCalibre, said: “This is a small “boutique” fund run by two very experienced managers. It is an extremely useful portfolio diversifier and the managers understand that the money they manage belongs to their clients, and they want to see it rise in value. The fund is one of the few in the sector that targets an absolute return from diversification and risk management alone. It does not short-sell any securities or indices for downside protection. Over the past five years, the fund has achieved positive returns in 92% of rolling 12-month periods, with an average return of 7% and volatility equal to just 25% of that of the FTSE All Share index. I think it is a great alternative for investors looking to diversify away from riskier assets.”
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