By ADRIAN LOWCOCK 02/12/2010
In our Spot the Dog guide we identify funds which have performed badly over 3 years and suggest investors should consider moving their money away from these ‘dog’ funds.
However, we realise that it is important for us to not just highlight underperforming dog funds but also to help our clients spot the stars. Below we highlight a selection of our top rated funds in the five most popular equity sectors.
AXA Framlington UK Select Opportunities
Nigel Thomas has a track record of more than 23 years investing in the UK and we awarded him our top 5 Star rating when he took over this fund in 2002. Thomas focuses on small and mid sized companies where his stockpicking skills and the freedom to pursue his own ideas have contributed to strong outperformance relative to the benchmark. Indeed since receiving our 5 star rating this fund has outperformed the FTSE All Share by 31.5%.
Schroder European Alpha Plus
Leon Howard-Spink has an 11 year track record of strong performance. The fund invests throughout Continental Europe, favouring companies with sound business models capable of producing growth regardless of the economic environment. Howard-Spink's stockpicking skills are focused on high quality companies where earnings volatility is low. This approach has resulted in a 11.12% out performance of the FTSE Europe Excluding UK index since he took over management in December 2005. Initially we awarded this fund a 4 Star rating, only to upgrade it to the full 5 stars within a year.
GLG Japan Core Alpha
This fund stands head and shoulders above its peers in the Japan sector. The country's economic troubles and market turbulence have led to confusion for fund managers strategies that work one year frequently lead to disaster the next. Fund manager Stephen Harker has turned this instability to his advantage, devising a simple yet effective strategy that enables the fund to perform in all market conditions. We have rated this fund since October 2008, since then it has outperformed the Topix index by 37%.
First State Asia Pacific Leaders
This fund is run by First State veteran Angus Tulloch, who has a 22 year record of success in Asian markets. Tulloch takes a conservative approach to investment and favours companies with safe, predictable revenue streams. As a result this fund typically protects investors' capital in times of trouble such as the 2008 banking crisis, but also grows their money when markets rise. We have rated the fund since June 2005, during which time it has outperformed its benchmark index (MSCI Asia Pacific excluding Japan) by 45.2%.
M&G American
The high profile of the US stockmarket means that fund managers who can add value are notoriously hard to come by, but in Aled Smith M&G seem to have found one. M&G give Smith the freedom to invest anywhere he sees fit in the market and to take a long term approach with a view to capital growth. Bestinvest initially awarded this fund 3 stars in November 2006, but have since upgraded it to a 5 star rating. Since then the fund has outperformed the S&P 500 by 19.12%.