The vast majority of names on the list are extremely high profile, and run some of the industry’s largest investment portfolios. However Lewis – who is little known to many financial advisers, let alone private investors – has not seen anywhere near the kind of inflows into his fund as many of his rivals have.
His £68m Cavendish Worldwide fund is a top-quartile performer in the highly competitive IMA Global sector over five and 10 years.
Performance of fund vs sector over 10-yrs
| Name | 1yr returns (%) |
3yr returns (%) | 5yr returns (%) | 10yr returns (%) |
|---|---|---|---|---|
| Cavendish - Worldwide | 11.86 | 29.55 | 36.09 | 170.62 |
| IMA Global | 11.75 | 27.36 | 26.15 | 133.34 |
Source: FE Analytics
He has also outperformed his peers over one- and three-year periods, although not to the same extent.
Over the last decade, the Worldwide fund has returned 170.62 per cent, compared with 133.34 per cent from the IMA Global sector average. Lewis’s portfolio has been marginally more volatile though.
Performance of fund vs sector over 10yrs
Source: FE Analytics
Looking back at discrete calendar-year performance, a clear trend appears: Cavendish Worldwide has outperformed in all eight rising markets, but has underperformed during the two years when they fell.
The underperformance during falling markets has not been particularly significant, however. The fund only fell short of its sector by 0.58 percentage points in 2008, and by only 2.98 percentage points in 2011.
Lewis has run the portfolio since its launch in 1994, making him one of the longest-standing managers on a single fund in the entire IMA unit trust and OEIC universe.
Cavendish Worldwide has returned 206.98 per cent since inception, beating its sector average by around 40 percentage points.
More recently, Lewis has taken charge of the Cavendish UK Balanced Income fund, which sits in the IMA UK Equity & Bond sector.
Since its launch in May 2010, the £27m fund has returned 35.96 per cent, compared with 28.89 per cent from its IMA UK Equity & Bond Income sector average.
Performance of fund vs sector since launch
Source: FE Analytics
The fund has a yield of 4.6 per cent.
Lewis says he currently favours equities over bonds, which is reflected in the 80/20 split in favour of the riskier asset class.
"Bond prices are extremely high," Lewis told FE Trustnet. "Yields on investment grade bonds are generally below inflation."
"Whether or not there is a bubble depends on your view on equities. Bonds are yielding more than cash, so if you think equities are set to fall then there is still a case for holding them."
"However, I still think there is very good fundamental value in equities."
Lewis thinks equity markets will face a bumpy ride this year and says a number of shocks are likely.
"Growth is going to be pretty low for a long time, which means there is no margin for error," he explained.
"If UK GDP growth was at 5 per cent, something a little below expectation – say 4.8 per cent – wouldn’t be a big problem."
"However, if you’re at 0.1 per cent and there’s a disappointment, then everyone starts talking about a triple-dip recession."
"On a long-term view though, we see value. We’re not traders," he added.
Lewis says he has seen much better value in his career, which dates back to the 1970s.
"I’ve seen market valuations that are so cheap, it would be difficult for a newcomer to believe they were that cheap," he said.
"In the early 1970s, they were incredibly cheap in some cases. Large UK companies with good balance sheets were trading on five-times earnings."
"Likewise, the Israeli market was incredibly cheap at certain points in the 1990s."
Lewis’s two favourite sectors at the moment are the US and emerging markets, which is reflected in his regional weightings.
His Worldwide portfolio has 22 per cent in North America and 40 per cent in emerging markets.
"We remain very cautious on the eurozone, but like the US," he said. "The banking sector is in good shape which is always a big driver of market performance."
"I think they’ll avoid the fiscal cliff, but even if they don’t, I don’t think it will make a big difference."
"We like emerging markets because they are very cheap."
He lists China, Brazil and Mexico as three countries he rates particularly highly at the moment.
Cavendish Worldwide has a total expense ratio (TER) of 1.6 per cent and is available for a minimum investment of £2,500.
It is a highly diversified portfolio of more than 100 holdings. Only 13.4 per cent of assets are invested in the top-10 companies. The fund has a multi-cap focus.
The UK Balanced Income fund is one of the cheaper options in its sector, with a TER of just 1.37 per cent. The fund requires a minimum investment of £2,500.