The £6.9m fund has returned a good 51.4 per cent in the past three years, placing it 16th in the Investment Management Association’s flexible investment share sector, according to data from Morningstar.
The objective of the portfolio is to provide capital growth and an above-average sector yield, according to its latest factsheet. Fund manager Peter Hewitt has looked to achieve this by investing mainly in a spread of equities from investment trusts, mainly listed in the UK.
In what will appeal to short term investors, the portfolio has high liquidy with a 48 per cent exposure to money markets. It also has a high 37.1 per cent Fixed Interest exposure, the reminding 14.9 per cent is invested in equities.
The portfolio’s top holdings are the £3.4bn Scottish Mortgage Investment Trust, at 4.9 per cent; the Perpetual Income and Growth Investment Trust, at 4.5 per cent; and the £768.3m Polar Capital Technology Trust at 4 per cent.
The minimum investment is £1,000, and the portfolio has a low ongoing charge of 1.59 per cent.
In the same sector, the £968.7m M&G Managed Growth Fund is a fettered portfolio, with the aim of achieving long-term capital growth.
According to fund manager Randeep Somel, equities represent the best opportunities for long-term growth, hence the portfolio has a 96.9 per cent exposure to equities. The remaining 3.1 per cent is in money markets.
US equities has the highest exposure, at 26.2 per cent. This is followed by a 22.8 per cent exposure to international equities and 20.1 per cent to UK equities.
The portfolio is well diversified across capitalisation tiers and international areas, and may also invest in other collective investment schemes and directly in securities, fixed-income assets, warrants, money market instruments, deposits, cash, near cash and derivatives.
Since the beginning of 2013, the portfolio has underperformed in the sector and has returned 15.09 per cent in the past three years, placing it 111st in the sector, according to Morningstar.
The portfolio’s top holdings are the £2.6bn M&G Global Basics Fund, at 26.1 per cent; the £968.7m M&G Global Growth Fund, at 16.7 per cent; and the £1.7bn M&G Global Emerging Markets Fund, at 12.1 per cent.
The fund’s minimum investment is £500, and it has an ongoing charge of 1.72 per cent.
| F&C MM Investment Trust | M&G Managed Growth Fund |
| TOP FIVE HOLDINGS | TOP FIVE HOLDINGS |
| Scottish mortgage investment trust 4.9% | M&G global basics 26.1% |
| Perpetual income & growth IT 4.5% | M&G global growth 16.7% |
| Polar capital technology trust 4% | M&G global emerging markets 12.1% |
| TR property investment trust 3% | M&G Asian 8.8% |
| Jupiter European opportunities 3.4% | M&G European 5.3% |
ADVISER SAYS...
Paul Coffin, wealth manager at London-based Capital Financial Markets, said: “F&C has a long record of producing consistent returns without taking undue risk. This is evidenced by a comparison between this fund and the M&G Managed Growth. Another difference is that the M&G fund is fettered, while the F&C Fund invests in a selection of different and complementary investment trusts from across the market. ITs often perform significantly better than their unit trust cousins, have been shown to have lower fees, and are also more transparent.
“A combination of good management and the use of ITs has meant that the F&C fund has far outperformed M&G, and has done so taking lower risk. This is evidenced by the three-year sharp ratio of 1.19 for the F&C fund, compared with 0.09 for M&G.
“F&C’s historic volatility over the past three years is 9.2 against 10.28 for M&G. As well as the risk statistics, the F&C fund has far outperformed in absolute terms. Over the past three years, F&C was up 46.6 per cent against its benchmark of 31.9 per cent. M&G has increased 10.2 per cent against the same benchmark. Considering the greater risk taken, and the underperformance, investors in the M&G fund should switch to the F&C fund. In addition, investors get access to a broader selection of investments through the ITs.”
