Rob Morgan, investment analyst at Hargreaves Lansdown
“I think I’d have to go for the Liontrust European range, which has done very well lately. Gary West and James Inglis-Jones run two solid funds – Liontrust European Growth and European Absolute Return – but both struggled to attract much in the way of assets."
"The absolute return fund has had particularly disappointing inflows. It’s a mirror of an institutional fund that’s done really well since its inception in 2006. Liontrust launched a retail version in 2009, but initially it struggled."
"A lot of investors have chosen to ignore it because of this period of underperformance, but it’s done a lot better in the last year or so, and suits the turbulent conditions we are facing at the moment."
"I think investors are missing out on a couple of hidden gems."
The £25.7m Liontrust European Absolute Return fund has returned 5.73 per cent since launch. In the first six months the fund lost 5.12 per cent, but it is the third-best performing vehicle in IMA Absolute Return over a one-year period.
The fund appears on Hargreaves Lansdown’s Wealth 150 list.
Peter Walls, manager of Unicorn Mastertrust
"I’d have to go for the Independent Investment Trust. It is independent by name and by nature, in that it is self managed and isn’t part of a larger investment house. It’s a highly concentrated best ideas portfolio, which has done just as well as some of the more high-profile funds in its sector." "Manager Max Ward comes from very good stock, and has an excellent record over a very long period. He, along with one of the investment trust’s directors, Douglas McDougal, was a former partner of Baillie Gifford, and helped turn it into the power-house it is today."
"Around 25 per cent of the shares are owned by the manager, so he’s put his money where his mouth is. It had a good few years after it was launched in 2000, which were then followed by a sticky period in the mid-2000s."
"However, performance has picked up quite nicely recently."
The fund has returned 122.98 per cent over a 10-year period, outperforming the average IT Global Growth fund by 46 per cent. Ward lost substantially more than his peer group in 2007 and 2008, but it is a top-quartile performer over a three-year period.
Richard Hancock, investment analyst at Financial Management Bureau
"I’m a fan of Stephen Adams, manager of Aegon UK Equity. He’s an index-plus manager, so the fund doesn’t get as much coverage as some of its high-conviction competitors out there."
"However, the fund does exactly what it’s designed to do, and consequently it’s got an extremely consistent record over a long-term period."
Aegon UK Equity has returned 12.63 per cent over a five-year period, outperforming its FTSE All Share benchmark by just over 6 per cent. It has £353m assets under management (AUM) and a total expense ratio (TER) of 1.59 per cent.
"It’s a similar story with Guy Monson’s Sarasin EquiSar Global Thematic fund. A lot of these smaller fund managers are less retail orientated, and spend less on marketing and advertising. However, this doesn’t take anything away from their performance."
Sarasin EquiSar Global Thematic has returned 164.42 per cent since it was launched in July 1994, outperforming its IMA Global sector average by 58 per cent.
However, the fund is a fourth-quartile performer over one- and three-year periods.
Elizabeth Savage, assistant manager of Rathbone Total Return fund
"Post-2008, investors have become wary of vehicles that are underwritten by the banks. However, autocalls could provide a good high-Beta play into a recovery and allow investors to capture some upside whilst maintaining an attractive, asymmetric risk profile." "They provide investors with the potential to achieve a pre-defined capital return and early maturity, provided the FTSE 100 is trading at or above a certain level on each anniversary date."
"Currently, there are some defensive autocalls trading in the secondary market at attractive levels, including the HSBC 9.35 per cent Defensive Autocall. This offers investors the chance to earn a yield-to-call of around 20 per cent in the first year, if the FTSE 100 is at, or above, 5,853 on 20 July 2012."
"If the FTSE misses this level, then there are four further chances to achieve a return. The downside risk is that if in five years’ time the FTSE 100 is at or below 3,512.29, then capital will be reduced in-line with the market."
"If the index is above this level, but has not auto-called, then principal is returned. The counterparty risk is with HSBC and the upside return is capped."