September is also known as being a cruel month for investors, with the statistics showing it has a long record of providing disappointing returns.
Darius McDermott, managing director of Chelsea Financial Services, says that it looks like we may be seeing the end of a bull run that started with Draghi’s famous speech introducing the outright monetary transactions [OMT] last year.
He says that the combination of macro concerns and the strong run in equities means that de-risking your portfolio makes a lot of sense.
Here, FE Trustnet looks at five funds that might help investors sleep easier this early autumn.
Henderson UK Absolute Return
McDermott rates the £182m Henderson UK Absolute Return fund for investors who want to be able to capture upside as well as protect against the downside.
The long/short portfolio sits in the absolute return sector and is managed by Ben Wallace and Luke Newman.
"It has volatility lower than the sector average, although if markets go down 20 per cent he could go down 3 or 4 per cent, but it has defended well on the downside and it has its foot on the gas at the moment," McDermott said.
"It is up almost 12 per cent this year having had average performance for a couple of years previously, and appears to be invigorated."
Performance of fund vs sector over 1yr
Source: FE Analytics
The fund requires a minimum initial investment of £1,000 and has ongoing charges of 1.75 per cent.
Insight Absolute Equity Market Neutral
McDermott also rates the £801m Insight Absolute Equity Market Neutral fund, another absolute return fund, but one with a much lower volatility profile.
Whereas the Henderson fund can choose to be “long” or “short” stocks, the Insight fund uses a pair-trade system to try to eliminate the effect that the movement of the market has on its returns.
Each long position is paired with a short one, giving the fund the difference between the two as a return whether the market goes up or down.
"It has a very good track record of positive returns and when they have had a negative month it is only -0.1 or -0.2 per cent," McDermott said.
He points out that the fund has only made 15.88 per cent over five years, but says that it is the low volatility and consistency of returns that make it attractive to a cautious investor.
Performance of fund vs sector over 5yrs
Source: FE Analytics
The fund requires a minimum initial investment of £3,000 and has ongoing charges of 1.17 per cent.
Rathbone Income
Kerry Nelson, managing director of Nexus IFA, said: "When things are quite difficult and it’s hard to see where you are going to get capital appreciation, an equity income fund can make up for it with dividends."
"If you are trying to achieve some growth that’s more meaningful than cash, equity income does a good job."
She tips Rathbone Income, a £590m portfolio run by Carl Stick since January 2000.
Data from FE Analytics shows that it has made 59.96 per cent over the past three years, putting it in the top quartile of a sector that has made just 47.5 per cent.
Performance of fund vs sector and index over 3yrs
Source: FE Analytics
The fund has won five FE crowns and has ongoing charges of 1.56 per cent. It requires a minimum initial investment of £1,000.
Liontrust Macro Equity Income
Nelson also rates Liontrust Macro Equity Income, a £324m portfolio run by FE Alpha Managers Stephen Bailey and Jan Luthman.
The fund struggled in 2012, making 6.28 per cent while the market grew by 14.01 per cent, but it has done better than the sector average in the two most recent down markets of 2011 and 2008.
As the name suggests, Luthman and Bailey run their fund on a top-down basis, trying to identify economic, social and political themes that offer investment opportunities.
It is currently underweight financials, which will not be helping it in the current environment, while its biggest sector bet is in the healthcare sector, which makes up 22.4 per cent of the fund.
The fund is available with a minimum initial investment of £1,000 and has ongoing charges of 1.6 per cent.
CF Miton Special Situations
Both Nelson and McDermott also rate FE Alpha Manager Martin Gray’s CF Miton Special Situations fund.
"Martin’s fund is multi-asset but primarily equities, bonds, currencies and properties," McDermott said.
"He has got a spectacular track record of not losing money when the market goes down – he actually made money in 2008 when the vast majority of assets lost money."
"He is the standout choice for cautious investors."
Performance of fund vs sector and index in 2008
Source: FE Analytics
Data from FE Analytics shows that the fund made 7.26 per cent in that year when the market lost 29.93 per cent. The worst of the sell-off happened in September of that year.
However, the fund has also gone through periods of underperformance when its cautious positioning has seen it lose out on the upside.
It ended 2012 0.63 per cent down while the FTSE All Share made 12.3 per cent.
Gray runs the portfolio with co-manager James Sullivan.
Its ongoing charges are 1.84 per cent and it requires a minimum initial investment of £1,000.