F&C MM fund gives strong returns from mix of trusts

The £39.67m fund has climbed to 17th place in the Investment Management Association’s Flexible Investment sector, notching up returns above the peer average of 15.67 per cent.

Peter Hewitt has been the manager for more than 10 years and he attributed the performance to rigorous research.

In the fund’s factsheet, Mr Hewitt said he picked investment trusts that will grow in value, not because they are priced at a discount to net asset value.

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He added: “The fund is not constrained by any benchmark, which is key in providing the manager with flexibility in picking a mix of trusts that they believe can deliver consistently strong returns for investors in different market conditions.”

Scottish Mortgage, Perpetual Income & Growth and Polar Capital Technology have all made the grade, making up the first, second and third biggest holdings in the fund respectively.

The Scottish Mortgage Investment Trust, run by Baillie Gifford and managed by James Anderson, is currently trading at a discount to net asset value of 1.4 per cent. Its holding in the F&C fund is 5.09 per cent.

The annual management charge is 1.25 per cent and the total expense ratio is 1.66 per cent. The initial and additional investments allowed have a minimum of £1000, but monthly savings of £50 are also permitted. Investors can access the fund through an Isa.

In the same sector in 87th place, the CF GHC Resilient 6 fund tells a different story with three-year returns of just 10.71 per cent.

The £20.73m fund is one of three ‘resilient’ funds run by the GHC fund group and managed by Richard Harper.

The Resilient 6 fund is the most adventurous of the funds with 84.64 per cent invested in equities. The manager also has free rein to place up to half of the fund in global equities.

The fund’s factsheet stated that the fund was for investors “who are prepared to accept an even greater degree of volatility in order to enhance the fund’s longer-term income or growth potential”.

Its top-five holdings are a mixture of UK equity and index funds, with one real estate investment trust, the GCP Student Living.

The fund’s AMC is 1.5 per cent and its TER 2.45 per cent. The minimum initial investment is £1000 but clients can make additional savings of at least £1 thereafter. Minimum monthly savings of £100 are also allowed and it can be accessed through an Isa.

Adviser says...

Phil Perry, adviser for Cheshire-based Ark Financial Planning, said: “The F&C fund has performed well for the past three years because of the risk it is taking. Compared to others in its sector it is taking a much higher risk with its investments which means that it is more volatile. Higher risk, however, ultimately leads to higher returns.”

F&C Multi Manager Investment Trust
Scottish Mortgage: 5.09%
Perpetual Income & Growth: 4.69%
Polar Capital Technology: 4.61%
TR Property: 3.74%
Jupiter European Opportunities: 3.58%

CF GHC Resilient 6
iShares UK Dividend: 5.07%
Fidelity MoneyBuilder US Index: 5.01%
HSBC FTSE All Share Index: 4.93%
GCP Student Living: 4.62%
Fidelity UK Smaller Companies: 2.54%