Finding the time to research new funds can be challenging for the average private investor and with many advising a diversified portfolio it can be even harder.
Multi-asset funds tend to alleviate this problem, offering a one-stop shop solution for investors and taking on the asset allocation decisions so that you don’t have to.
Investors now have less than two weeks to make use of the ISA allowance of £20,000, with the 4 April deadline rolling around fast.
While some have done lots of research to blend a portfolio together, others simply don’t have the time, so below FE Trustnet asks fund pickers to suggest a fund that will serve a one-stop-shop for the time-constrained investor.
Jupiter Merlin Balanced
First up, Informed Choice managing director Martin Bamford suggested that the one-stop shop fund for ISA investors who don’t want to manage their portfolio is Jupiter Merlin Balanced.
Headed up by the FE Alpha Manager duo of Algy Smith-Maxwell and John Chatfeild-Roberts since 2002, the pair were joined by Amanda Sillars and David Lewis in 2014.
“This ‘fund of funds’ offers access to a range of leading fund managers, both household names and more boutique managers that investors might not ordinarily select,” Bamford said.
“The underlying funds invest in international equities, fixed interest stocks, commodities and property, making this a ‘fire and forget’ investment choice.”
The four FE Crown-rated fund has 26.6 per cent in UK equities funds, 25.9 per cent in global funds and 14.5 per cent in US funds.
Its largest holdings in each bucket are the five FE Crown-rated TB Evenlode Income and Fundsmith Equity fund and the four crown-rated Findlay Park American respectively.
Jupiter Merlin Balanced has been a top quartile performer in the IA Mixed Investment 40-85% Shares sector over the last decade, returning 115.23 per cent after fees.
It is also top quartile over the last three years and is in the second quartile of the sector over one- and five-year periods.
Performance of fund vs sector over 10yrs
Source: FE Analytics
Jupiter Merlin Balanced has an ongoing charges figure (OCF) of 1.65 per cent and a yield of 2.1 per cent.
M&G Episode Income
Up next is the three FE Crown-rated M&G Episode Income fund, which sits in the less equity-heavy IA Mixed Investment 20-60% Shares sector.
The £805m fund, which launched in November 2010, is run by FE Alpha Manager Steven Andrew and deputy manager Maria Municchi.
It has been a top performing fund in the sector since its launch, outperforming the average peer by 32.13 percentage points, as the below chart shows.
Performance of fund vs sector since launch
Source: FE Analytics
The fund aims to provide a regular, growing income and long-term capital growth potential from a variety of asset classes, Gavin Haynes managing director Whitechurch Securities said.
“At all times the majority of the portfolio will be dedicated to core income producing assets such as equity income, fixed interest and commercial property. However, the manager will tactically allocate towards growth areas when deemed appropriate,” he added.
“M&G have a strong presence across equities, fixed interest and property which provide the manager with excellent resources to draw upon.”
Earlier this week, Andrew explained that he has been upping the portfolio’s exposure to US Treasuries as insurance against a major drop in equity prices and as a diversifier to some of the fund’s emerging market bonds.
Overall the portfolio is 47 per cent weighted to equities with the largest holdings in the US (16 per cent) and Japan (9 per cent) while it holds 40 per cent in government bonds. There are also smaller positions in global and corporate bonds, property and cash.
M&G Episode Income has a yield of 2.46 per cent and an OCF of 0.81 per cent.
Stewart Investors Worldwide Sustainability
Third on the list is Stewart Investors Worldwide Sustainability, which Rowan Dartington investment analyst Ben Stoves suggests could be another strong option for investors looking for broad exposure to global growth.
“Sustainability has been a feature of [the team’s] approach for some years and is not an ethical stance, though many I’m sure will view this as a green fund, it is simply looking at themes that will drive the world’s economy in the future,” he said.
“This fund brings together many different themes and an investment process that has driven consistent performance.”
The three FE Crown-rated fund, which is run by Nick Edgerton and FE Alpha Manager David Gait, is a global equities fund.
It is heavily overweight consumer staples and healthcare while underweight industrials, financials and consumer discretionary companies.
It is 37 per cent weighted to Europe and the Middle East with 19.5 per cent in the US and 10.9 per cent in emerging market stocks.
Since its launch in 2012 the portfolio has returned 98.33 per cent, 68 basis points behind the MSCI AC World index and 10.21 percentage points ahead of the IA Global sector average.
Stewart Investors Worldwide Sustainability has a yield of 0.63 per cent and an OCF of 0.99 per cent.
Invesco Perpetual Global Targeted Return
Last is Invesco Perpetual Global Targeted Return, which is recommended by Mazars Wealth Management senior economist George Lagarias.
The fund is similar in process to the Standard Life Investments Global Absolute Return Strategies fund – also known as GARS – with the team behind it joining Invesco from Standard Life Investments to launch in the fund in 2013.
Invesco Perpetual Global Targeted Return has the aim of preserving capital in all market conditions, over rolling three-year periods.
It is also targeting income of LIBOR +3.5 per cent before fees, with less than half the volatility of global equities.
The portfolio is built around 25 investment ideas across currencies, equity markets, inflation, interest rates, credit and commodities.
“The strategy has performed well, and with very low volatility over the past three years. It has mostly managed to deliver on its goal,” Lagarias said.
Performance of fund vs benchmark over 3yrs
Source: FE Analytics
“Risk management is very strong, with risk managers involved early in the idea selection process,” he added.
“Back tested it would have performed -2 per cent to -3 per cent in 2008, a testament to its versatility. So long as we remain in a 2-standard deviation environment it would probably be my one-stop shop.”
Invesco Perpetual Global Targeted Return has a yield of 1.29 per cent and an OCF of 0.87 per cent.