2019 Grand National: Four funds for the long-term and four horses for Saturday

Darius McDermott 04/04/2019 in Multi-Asset

The saying “it’s a marathon not a sprint” could never be truer than for the 40 horses and jockeys that line up for the Grand National at Aintree this Saturday.

The 180-year old race is one of the most popular events on the UK sporting calendar. Last year 13 million people (that is 20% of the UK’s population) bet on the race with up to £250 million heading to the bookies. The average price of a horse winning the race is 20/1, meaning you’ll make a tidy profit if you get lucky!!!

The first fence is always a phenomenal sight with all 40 horses careering over it at the same time. But the initial sprint soon gives way to a slog and the horses with the best stamina always come out on top.

That made us think at FundCalibre. We wanted to look at which fund managers have delivered for investors over the long-term – through the highs and lows of a market cycle. Below are four managers who have stood the test of time (and four horses that can win this year Grand National for a bit of fun).

The bookies favourite: R&M UK Recovery (Tiger Roll)

There is nothing not to like about last year’s winner Tiger Roll (apart from the short-price). He is not the biggest horse, but he keeps outlasting all of his rivals – it makes him the first horse since Red Rum in 1974 to have a favourite’s chance of retaining his crown

As the name suggest, the R&M UK Recovery fund, managed by Hugh Sergeant looks for good businesses that are currently experiencing below normal profit levels, which are depressing their valuations, but which he feels can turn their fortunes around. The fund typically holds 200 or so of these companies.

Like Tiger Roll himself, the fund is not the largest at £263 million, but the nature of the portfolio and its additional flexibility has seen it produce consist performance in the past decade returning 382.9%*, compared to an average of 179.6%* for funds in the Investment Association UK All Companies sector.

The fancy with a track record: T. Rowe Price Global Focused Growth Equity (Vintage Clouds)

Vintage Clouds has never run in the Grand National before but has run in the Scottish version twice (finishing third and seventh). His ability to get around shows he is a proven runner at extreme distances and is a big player this Saturday.

You do not get many funds which consistently outperform more than the T. Rowe Price Global Focused Growth Equity portfolio. The manager, David Eiswert, looks for businesses which have the potential to generate above-average and sustainable rates of earnings growth. The fund is currently overweight information technology, with Alphabet (4%**), Facebook (3%**) and Amazon (2.6%**) the big digital and media players among its top 10 holdings. The fund is a proven winner, returning 328%* in the past 10 years compared to 193.6%* for the Investment Association Global sector.

The class horse in the race: M&G Optimal Income (Anibale Fly)

The Grand National is a handicap race – this means horses are given a weight according to their ability. The top-weighted horse is Anibale Fly, a class performer who has placed in the last two Gold Cups as well as finishing fourth in last year’s Grand National, a reflection of the horse’s consistency.

The M&G Optimal Income fund managed by Richard Woolnough has similar traits and should be a consideration for most investors looking towards the fixed income market. The fund has a very flexible mandate which allows it to shift the interest rate exposure and to invest across the credit spectrum. At £17.8 billion the fund is one of the largest retail offerings in the UK – something which is supported by consistent outperformance. In the past decade the fund has returned 107.5%* compared to 98.6%* for the Investment Association Sterling Strategic Bond sector.

The specialist who can deliver: Axa Framlington Global Technology (Falsom Blue)

Falsom Blue is not among the favourites for the Grand National but is a quality horse in its own right. However, if the ground is soft or heavy it could well be the horse to be on as it is a specialist in the mud.

When it comes to specialist funds it is hard to top the performance of the Axa Framlington Global Technology fund, managed by Jeremy Gleeson. Jeremy, who has managed this fund since 2007, believes individual stock picking ultimately drives portfolio construction. As a result, each holding is exposed to one or more key themes that are expected to underpin technology sector growth over the coming years. He specifically targets new technology with strong commercial potential. This fund has returned 545.4%* in the past decade, well above the 405%* produced on average in the Investment Association Technology and Telecommunications sector.

*Source: FE Analytics, total returns in sterling, ten years to 3 April 2019
**Fund factsheet, 28 February 2019

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions.Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice.Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.