Unicorn fund gallops ahead

The objective of the £23.8m portfolio, which sits 7th in the Investment Association Flexible Investment share sector, is to provide exposure to a diversified range of equity markets and asset classes. It has a 95 per cent exposure to equity investment instruments, non-equity investment instruments and financial services, according to its latest factsheet.

Fund manager Peter Walls has been at the helm since September 2008. He considers himself a contrarian investor, and gained his knowledge of the collective funds industry as an investment trust analyst and commentator from 1983 to 2001.

According to its factsheet, the portfolio’s net asset value appreciated by 1.4 per cent in February.

Leading contributors to its performance were SVG Capital, +13 per cent; Baillie Gifford Japan, +9.5 per cent, and the Fidelity Special Values, +5.6 per cent.

Main detractors were Aberdeen Latin American Income, -4.4 per cent; and Candover Investments, -4 per cent.

The portfolio’s top holdings are the Foreign and Colonial Investment Trust, at 4.4 per cent; the TR Property Investment Trust, at 4.3 per cent; and Caledonia Investments, at 3.9 per cent.

The minimum investment is £2,500, and the portfolio’s ongoing charge is 1.91 per cent.

In the same peer group, the Rathbone Total Return Portfolio – despite underperforming its sector since January 2013, according to FE – has returned 16.41 per cent in the past three years, placing it 102nd in the sector.

The objective of the £66.8m portfolio is to achieve an increasing income and capital return.

Fund manager David Coombs and assistant manager Mona Shah have targeted a return equal to 2 per cent above sterling six-month Libor over a minimum three-year period, and a volatility rate equal to one-third or below that of equity markets as measured by the MSCI World Equity Index.

The portfolio’s largest asset allocation is in bonds, with a 41.15 per cent exposure. This consists of corporate bonds at 32.84 per cent, index-linked bonds at 4.99 per cent, and government bonds at 3.32 per cent.

It has an equities exposure of 21.87 per cent and 16.17 per cent exposure to relative value, macro/trading and long/short equities. The remainder is in cash at 14.75 per cent, and property at 6 per cent.

The portfolio’s top holdings are the Kames Investment Grade Bond Fund, at 4.77 per cent; the Pimco Global Investment Grade Credit Fund, at 4.49 per cent, and the Artemis Global Income Fund, at 4.22 per cent.

The minimum investment is £1,000 and ongoing charge is 2.36 per cent.

ADVISER SAYS...

Darius McDermott, managing director of London-based Chelsea Financial Services, said: “The Unicorn Masterfund has had stellar performance since launch – up 223 per cent versus the flexible investment sector return of 97 per cent. A mixed-asset fund, this vehicle has benefited from strong runs from both small cap trusts and listed private equity vehicles. Mr Walls has also boosted long-term performance by investing in quality discounted trusts run by what he sees as the industry’s top fund managers. Its top regional holding is the UK (47 per cent), but it also has significant weighting in Asia (20 per cent) and Europe (10.5 per cent).

“The Rathbone Total Return can be viewed as a core holding for those seeking to generate long-term returns at a lower volatility than the equity markets through a mix of global assets. The fund targets a return equal to 2 per cent above sterling six-month Libor over a minimum three-year period. The fund has surpassed this performance target over one, three and five years, running the fund at below half of the MSCI world index’s volatilty. The fund is run by David Coombs, whom we consider one of the best multi-asset managers in the sector. Currently, 33 per cent of the fund is invested in credit and government debt, 49 per cent in global equities and 17.7 per cent in other diversifiers such as property and hedge funds.”