Contrarian approach does well for Premier

Contrarian approach does well for Premier

A contrarian investment approach has helped the Premier Multi-Asset Distribution A to perform well in the IA Mixed Investment 20-60 per cent sector, data from FE has shown.

Managed since its launch in 1995 by veteran manager David Hambidge and his mixed asset team at Premier Asset Management, the £669.4m portfolio has a spread of investment across a range of assets.

Its largest asset class exposure is to UK equities, at 29.8 per cent, followed by property shares at 18.9 per cent.

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The portfolio also has exposure to global corporate fixed interest, international equities, global fixed interest, alternative assets and cash and cash equivalents at 3.7 per cent.

Within its individual holdings, the top spot is held by the £1.47bn Schroder Income A, at 4.8 per cent. Its top 10 holdings includes funds from more boutique fund managers, such as £411.9m Charlemagne Emerging Market Dividend, and the US$873.4m (£570m) Prusik Asian Equity Income funds.

Similarly, the manager does not follow the herd when investing geographically. Its geographic exposure is extremely varied, with 52.6 per cent stated as “non-specified”. The remainder includes 29.8 per cent in the UK, 13.9 per cent international and 3.7 per cent money market.

By contrast, there is the Allianz RiskMaster Conservative Multi Asset A fund, languishing at 118th place in the 120-strong sector.

As with the Premier portfolio, there is a team approach, with two lead managers, David Hollis and Zijian Yang, who have headed it since the fund was launched in May 2012.

The fund’s asset allocation has North American equities on top with 26.58 per cent, followed by three fixed interest assets – UK corporate bonds (22.91 per cent), UK Gilts (10.8 per cent) and international corporate bonds (8.42 per cent) – occupying nearly 40 per cent of the portfolio.

With UK equities only ranked ninth out of 10 asset classes at 3.56 per cent, the contrast with the Premier fund is marked.

Geographical distribution of the fund has UK (37.36 per cent) and North America (26.58 per cent) at more than half of the portfolio.

This is not the first of the RiskMaster funds to feature in the bottom 10 funds across their various Investment Association sectors.

RiskMaster Moderate, RiskMaster Defensive and RiskMaster Growth are all in the bottom 10 performers over three years in the IA Flexible Investment sector, while the RiskMaster Conservative is in the bottom 10 of the IA Mixed Investment 20-60 per cent sector.

However, at the end of July Allianz announced it has renamed the funds, tacking multi asset on at the end.

Adviser view

Paul Lindfield, director of wealth management at Manchester-based Sedulo Wealth Management, said: “Although these funds have similar objectives, their strategic and tactical asset allocations are polar opposites.

“This is somewhat derived in their objectives, with Allianz appearing to be inhibited by its risk targeting of volatility, and Premier being more unconstrained to provide income and long-term capital growth.

“The portfolio changes Premier has made are primarily concerned with achieving a decent and growing level of income. For example, there is zero allocation to US equities, zero commodities, and dramatically increasing exposure to UK property in 2013 to the near current maximum of 20 per cent.