Threadneedle managed fund delivers the goods

Sitting 20th in the Investment Association’s Mixed Investment 20-60 per cent share sector, the £114.5m portfolio uses a variety of funds to achieve its investment objectives. Over three years, the fund has returned 31.83 per cent.

Fund managers Damian Barry and Giles Gilbertson have an overweight equity position, at 43.6 per cent, with bonds the next highest conviction, at 33.7 per cent.

The fund is part of Threadneedle’s Managed Portfolio 3 to 7 funds, which provide opportunities for investors with different attitudes to risk, whereby portfolio 3 indicates a relatively low level, progressing to higher risk indicated by portfolio 7.

The portfolio has the UK as the largest equity holding, at 21 per cent. The remaining equity allocation is North American at 9 per cent; Japan at 7.3 per cent, and Europe at 6.3 per cent.

With the UK a strong conviction also in bonds, the portfolio’s largest holding is fixed interest, at 29 per cent.

The Threadneedle Fund is part of the multi-manager range that is being transferred to 7IM at the end of April.

In the same peer group, the Premier Multi-Asset Conservative Growth Fund has returned a decent 16.46 per cent in the past three years, placing it 141st in the sector, according to FE Trustnet.

The £97.9m fund aims to achieve a steady capital growth with a low-risk UK portfolio which hold a number of investments which are uncorrelated or inversely correlated with equity markets.

It is led by experienced fund manager David Hambidge and a team of three, with the objective of each holding to achieve a return in excess of Libor in steady interest rate and benign market conditions. While the fund has attained this in the past five years, it has underperformed in its IA sector in the past three years.

Exposure to asset classes moves according to the team’s view on the interest rate cycle, yield curve and likely movement in equity markets, according to its latest factsheet.

With a focus on low risk, the fund has a 39.7 per cent conservative equities exposure.

ADVISER SAYS...

Ben Yearsley, head of investment research at Bath-based Charles Stanley Direct, said: “The two funds have quite differing performances, with the Threadneedle fund consistently outperforming the sector while Premier’s fund underperforms. Threadneedle’s objective is to provide a relatively stable growing return with income. This fund of funds has a diverse array of underlying funds with currently 35 per cent in bond funds and the balance in equity, hedge and a tiny amount in property. Japan, one of the big overweights, will have been beneficial, as well as a decent US weight. This fund is due to transfer to the management of 7IM with the two named managers later this month.

“The Premier fund is more defensively orientated, with more invested in alternatives, absolute return funds and derivative positions, all are in the portfolio with a minimum objective of beating Libor – not an onerous task at the moment. This steady capital growth objective means that volatility in the fund is low and drawdowns are fairly small, suiting the more risk-averse investor. Interestingly, the fund has two large positions in convertible funds, seeking to benefit from both bond-like income and equity-style returns.”