Delivering an impressive return of 32.7 per cent since 2013, the £18.8m fund is ranked 19th in the IA Flexible sector, according to recent figures from Financial Express.
Fund manager David Stephenson leans heavily towards equities, with an 86 per cent exposure, according to the fund’s latest factsheet. By comparison, bonds make up 7.2 per cent and absolute return constitutes 6.6 per cent.
An enforced change to the fund came at the end of last year with the closure of the GLG Technology fund due to the departure of the managers. As a result Mr Stephenson reinvested part of the proceeds in Axa IM Global Technology, and added to existing holdings in Schroder European Alpha Income, Schroder Asian Alpha Plus, and M&G Global Dividend.
He has altered the balance of the portfolio to sectors in which there appears to be better value, particularly as growth stock valuations became more elevated over the past year.
By investing in a diverse range of equities across geographical sectors, the fund has also been cushioned against high volatility. The fund has 14.2 per cent exposure to Europe, 13.6 per cent to Japan and 13 per cent to UK growth.
The strong performance of holdings such as Legg Mason Japan Equity and SLI UK Smaller Companies has helped the fund outpace its sector this past year.
Top holdings include Polar Cap Japan at 5.8 per cent, and Schroder GAIA Sirios US Equity and Jupiter International Financials, both at 5.5 per cent.
Since the start of 2015, the fund has delivered a return of 7.4 per cent against the sector average of 2 per cent.
The minimum investment is £1,000, and the ongoing charge is 2.07 per cent.
In the same peer group, the Thesis iFunds Spectrum Indigo Fund has underperformed its sector over the past three years, returning 7.6 per cent since 2013, according to FE data.
By comparison, the sector has delivered a return of 12.5 per cent over the past three years.
The portfolio leans heavily towards UK equities, with more than half invested in mid-cap companies, topped up by nearly 12 per cent exposure to large and small caps.
Both Japanese and European equities each make up more than 10 per cent of the portfolio, split between small and large cap firms.
The fund management team has adopted a relatively conservative policy, hoping to achieve returns historically produced by corporate bonds at the level of risk associated with bond price performance, according to the fund’s latest factsheet.
It also invests in exchange-traded funds, exchange-traded commodities, and other regulated collective investment schemes.
The portfolio invests in transferable securities, money market instruments, deposits and cash. Throughout last year the team trimmed its exposure to the property market, reducing it to 0 per cent in May last year.
This was after the liquidation of the fund’s holdings in the European property market, due to a weakening of its risk and reward profile. As a consequence the team decided to bolster its investments into UK mid-cap equities.
The minimum investment is £5,000, and the ongoing charge is 3.48 per cent.
| TB Wise Strategic Fund | Thesis iFunds Spectrum Indigo Fund |
| Polar Cap Japan 5.8% | Cash & Equivalents 56% |
| Schroder GAIA Sirios US Equity 5.5% | iShares FTSE 250 ETF 7% |
| Jupiter International Financials 5.5% | iShares MSCI Japan Small Cap ETF 6% |
| Standard Life UK Smaller Companies 5.4% | iShares MSCI UK Small Cap ETF 6% |
| JPM Europe Dynamic (ex-UK) 5.3% | iShares FTSE 100 ETF 6% |
katherine.denham@ft.com
Adviser view
Patrick Connolly, certified financial planner at Chase De Vere, said: “These funds don’t have totally dissimilar aims in that the TB Wise Strategic Fund is aiming to beat inflation and the returns from deposit accounts, and the Thesis iFunds Spectrum Indigo aims for returns comparable with corporate bonds.
“However, they take radically different approaches to achieve their objectives. The Thesis fund, by moving out of equities, has the potential to look particularly good if stock markets continue to struggle, although if they bounce back then the fund is likely to get left behind.
“By contrast, the Wise fund can be very volatile – far more volatile than investors might expect for a fund that is aiming to beat inflation and deposit accounts.
“Both approaches have the potential to backfire and leave the managers with egg on their face, so I’m not in favour of either. We would like to see investments in a range of different assets, without too much or too little invested in equities. We would be wary of both approaches from so-called multi-asset funds, especially as both are small funds with high charges.”
