Analyst: Insight

However, it took Mike Pinggera and Steve Waddington, co-managers of the Insight Investment Diversified Dynamic Return fund, just six weeks to get Insight’s multi-manager range aligned to their views, following the departures of Patrick Armstrong and Ana Cukic Armstrong.

That was more than a year ago, and the pair are now fully focused on ensuring the fund’s growth and performance. Mr Pinggera says the whole Insight multi-manager range has been run to his design since March 2009.

He adds: "Since then it is ahead of its benchmark in an environment where it has benefited from significant rallies in the equity markets and all risk assets. We're still seeing opportunities and capturing them even though the market’s coming back, so we’re still on target to deliver the fund's objectives."

Compared to its benchmark – the three-month London Interbank Bid (Libid) rate – the fund has consistently and significantly outperformed, producing a return of 25.7 per cent over the year to April 30, according to the fund’s factsheet. Mr Pinggera says he also looks to beat Libor plus 6 per cent – this is arguably a fairly straightforward task, with the three-month sterling Libor rate at 0.73 per cent as of June 15. At the height of the banking crisis on September 30, 2008, it peaked at 6.3 per cent.

Mr Pinggera, who acknowledges that he is "not the most aggressive manager", says: "We will not take excessive risk within the fund just because our peer group is. There are lots of funds running with a full equity allocation, [but] we don’t believe we need to do that in order to hit our objectives over the cycle."

This stance has been reflected in the pair's recent decision to cut the fund's equity exposure drastically from 54.9 per cent, as at April 30, to 32.4 per cent by May 31. Although this has led to a positive 12-month performance with the fund producing returns of 11.2 per cent in the year to June 7, it is still languishing in the bottom quartile of the IMA Active Managed sector.

Despite this, or perhaps because of it, Mr Pinggera is adamant that his disciplined strategy will protect on the downside. The fund’s three-year performance – down 23.6 per cent – is also among the worst figures in the sector, but as this incorporates the change of manager, it is unlikely to be a full picture of his and Mr Waddington’s performance.

The main asset class to gain from the move away from equities is fixed income, which Mr Pinggera says reflects a wider growth in interest in this area. He adds that they are keen to "increase investments in positions that can grind out returns in volatile and potentially sideways markets".

"We are looking for things that are either supported by very strong managers or structurally more defensive than the traditional route," he says. "With that in mind, there are three funds we have taken up positions in: the Axa Short Duration US High Yield Bond fund, the Harbourvest Senior Loans fund, and very recently the Neuberger Berman Distressed Debt fund."