The Specialist sector contains funds with varied aims and strategies, meaning that different funds will be relevant to different multi-asset managers.
The $2.2bn fund is a top-10 holding in 22 multi-asset portfolios, which include FE Alpha Manager Bill McQuaker’s Henderson Multi Manager Active and FE Alpha Manager Tom McGrath’s IFDS Apollo Multi Asset Balanced funds.
The research also shows that Polar Capital Global Insurance, BlackRock Gold & General and PFS TwentyFour Monument Bond are favourites among multi-asset managers.
Most popular Specialist funds
| Name | Number of funds that hold it |
|---|---|
| Schroder ISF Asian Total Return | 22 |
| Polar Capital Global Insurance | 14 |
| BlackRock Gold & General | 8 |
| Aberdeen Global Indian Equity | 5 |
| CF Ruffer Baker Steel Gold | 5 |
| PFS TwentyFour Monument Bond | 5 |
| Schroder GAIA CQS Credit | 5 |
Source: FE Analytics
Schroder ISF Asian Total Return, which has five FE Crowns, is headed up by the duo of King Fuei Lee and FE Alpha Manager Robin Parbrook.
It was launched in July 2008.
It is not hard to see why the Luxembourg-domiciled fund is so popular with managers.
According to FE Analytics, Schroder ISF Asian Total Return has returned 138.27 per since its launch while its benchmark – the MSCI AC Asia Pacific ex Japan index – has returned just 65.12 per cent.
Parbrook and King Fuei Lee’s fund has also been considerably less volatile than the index over the period as well.
Performance of fund vs index since July 2008
Source: FE Analytics
The fund has beaten its benchmark over one year and has more than doubled its returns over three, with returns of 47.51 per cent.
It is made up of 64 holdings and its largest regional overweight is to Hong Kong. The portfolio holds 34.8 per cent in companies listed in the country, while the benchmark is just 9.5 per cent. It is also overweight Thailand and the Philippines.
The fund is primarily equity-focused, but the managers are allowed to use derivatives to protect against capital loss. However, the instruments currently make up a very small percentage of the fund.
Schroder ISF Asian Total Return has an ongoing charges figure (OCF) of 1.99 per cent and requires a minimum investment of £1,000.
The five crown-rated Polar Capital Global Insurance is the second most popular IMA Specialist portfolio among fund of fund managers.
IFDS Apollo Multi Asset Balanced and FE Alpha Manager Toby Ricketts’ five crown-rated Margetts Opes Growth are two of the 14 funds that count the Irish-domiciled portfolio as a top-10 holding.
Alec Foster has run the £319.5m Polar Capital Insurance fund since its launch in October 1998, and was joined on the management team by Nick Martin in September 2001.
The fund has consistently beaten its benchmark – the MSCI World Insurance index – over the short-, medium- and long-term.
Over five years Foster and Martin’s fund has returned 72.54 per cent, which eclipses the returns of the index.
Performance of fund vs index over 5yrs
Source: FE Analytics
Polar Capital Global Insurance has a concentrated portfolio of just 34 holdings.
Its third-largest position is investment legend Warren Buffett’s Berkshire Hathaway holding company, which makes up 5.9 per cent of total assets under management, and qualifies for the fund thanks to its holdings in the insurance industry.
It requires a minimum investment of £1,000 and has an OCF of 1.49 per cent.
Eight funds count FE Alpha Manager Evy Hambro’s BlackRock Gold & General fund as a top-10 holding, one of which is Troy Spectrum.
Hambro’s fund is Troy Spectrum’s 10th-largest holding, making up 3.8 per cent of the £83m portfolio.
BlackRock Gold & General has made 180.14 per cent over 10 years.
However with the mining sector coming under pressure recently and the gold price falling, Hambro’s fund has lost more than 20 per cent over six months, one year, three years and five years.
Richard Troue (pictured), investment analyst at Hargreaves Lansdown, says investors should not be put off by BlackRock Gold & General’s recent underperformance as he still believes it is a quality fund.
"If you put aside the unpopular gold mining sector, we are still positive on the fund," he said. "It is run by a very well-resourced management team which has bags of experience."
"I especially like the fact the fund focuses on large cap mining companies that are already in the production phase, so they tend to steer clear of pure exploration companies."
"In terms of the asset class itself, gold miners have been very beaten up recently and that has been exacerbated in the last week or so."
"Our general view is that now is the wrong time to be selling out of gold and gold mining companies, as there are still merits to holding gold as an insurance against further loss of faith in paper currency due to central bank intervention," he added.
The BlackRock fund has fared better over the short-term than CF Ruffer Baker Steel Gold, another popular specialist fund with managers.
Performance of funds over 5yrs
| Name | 1m | 3m | 6m | 1yr | 3yr | 5yr |
|---|---|---|---|---|---|---|
| BlackRock - Gold & General | -21.36 | -30.2 | -36.21 | -32.58 | -32.73 | -24.89 |
| CF Ruffer - Baker Steel Gold | -27.11 | -35.76 | -41.86 | -42.19 | -48.23 | -24.29 |
Source: FE Analytics
The £258.8m CF Ruffer Baker Steel Gold fund crops up in five fund of funds' top-10 holdings.
Aberdeen Global Indian Equity also appears in five funds' top-10 holdings. The $4.7bn portfolio was launched in March 2006 and is run by FE Alpha Manager Hugh Young and the Aberdeen Asian Equities Team.
Over that time it has made 95.21 per cent, compared with 71.11 per cent from the MSCI India index. It has an OCF of 2.11 per cent and requires a minimum investment of £1,500.
PFS TwentyFour Monument Bond and Schroder GAIA CQS Credit also appear high up the list, as they both feature in five fund of funds' top-10 holdings.