Fidelity Special Situations, Fidelity Strategic Bond, Jupiter Absolute Return, and Man GLG UK Income funds were among the new additions from to the FE AFI Balanced portfolio following the recent rebalancing.
Put together by a panel of leading UK financial advisers the FE AFI portfolios aimed at a specific age group, assuming a client is saving for retirement at age 65.
After looking at the new funds that advisers say any investor can hold – funds with a weighting in each portfolio – and changes to the FE AFI Aggressive portfolio, in this article we look at the FE AFI Balanced.
The FE AFI Balanced is suitable for a person in their mid-40s and includes a mix of funds usually found higher up the risk scale as well as some more lower-risk strategies.
Over 10 years, the FE AFI Balanced has made a total return of 122 per cent compared with a 121.96 per cent gain for the average IA Flexible Investment peer.
Performance of indices during H1 2019
Source: FE Analytics
During the first half of the year, FE AFI Balanced has returned 10.56 per cent and was marginally behind the IA Flexible Investment sector’s gain of 10.64 per cent.
With some advisers making allocations to their chosen funds across several portfolios there were a number of funds from the FE AFI Aggressive portfolio that also left Balanced.
Funds such as Neil Woodford’s embattled flagship fund LF Woodford Equity Income and Mark Barnett’s Invesco Income were among those leaving following the rebalance.
Of note was the Invesco Global Targeted Income and Janus Henderson Emerging Market Opportunities funds, two funds only held in the FE AFI Balance portfolio.
Invesco Global Targeted Income was launched in November 2016 and managed by the Invesco multi-asset team, including Gwilym Satchell, Richard Batty, Sebastian MacKay and Georgina Taylor.
The £87m, multi-asset absolute return strategy targets a gross income of 3.5 per cent per annum above UK three-month Libor, while aiming to preserve capital in all market conditions. Since launch, the fund has made a total return of 4.14 per cent.
The £218.7m Janus Henderson Emerging Market Opportunities fund, meanwhile, is currently overseen by Stephen Deane and has made a total return of 8.18 per cent over the past three years compared with a 21.49 per cent return for the MSCI Emerging Markets index and a 19.88 per cent gain for the average IA Global Emerging Markets peer.
Source: FE
There were a number of new faces joining the FE AFI Balanced portfolio too, including several well-known names.
FE Alpha Manager Alex Wright’s £3bn Fidelity Special Situations fund was one of the more notable additions following the latest rebalance.
The four FE Crown-rated fund – previously helmed by such high-profile managers as Anthony Bolton and Sanjeev shah – invests across the market cap spectrum and was one of the few UK equity strategies added to the FE AFI Balanced portfolio following the latest rebalance.
Wright looks for unloved and out-of-favour stocks entering a period of positive change and as such is more of a value, contrarian strategy, albeit a highly diversified one with more than 100 holdings. Since the manager took over on 1 January 2014, the fund has made a total return of 41.85 per cent, compared with a 33.54 per cent for the FTSE All Share index and a 28.67 per cent gain for the average IA UK All Companies peer.
Another well-known strategy and one also a UK equity sector was the five FE Crown-rated Man GLG UK Income fund managed by FE Alpha Manager Henry Dixon. The £1.2bn fund targets a yield in excess of the FTSE All Share with some capital growth.
Under Dixon – who joined the fund in 2013 – it has made a total return of 58.11 per cent against a 35.67 per cent return for the FTSE All Share index and a 29.03 per cent gain for the average IA UK Equity Income peer.
Source: FE
Other new additions included veteran investor James Clunie’s £1.3bn Jupiter Absolute Return fund and the £1.3bn Fidelity Strategic Bond fund overseen by Claudio Ferrarese and Timothy Foster, who took over management of the fund from Ian Spreadbury following his retirement.