Absolute return and equity funds land FundCalibre Elite Ratings


FundCalibre has awarded an Elite Rating to four new funds spanning equities and absolute return.

The Brooks MacDonald Defensive Capital fund, which FundCalibre director Clive Hale says is a “bit complicated”, is a multi asset fund in the Targeted Absolute Return sector.

While Targeted Absolute Return, the most popular IA sector in 2016, has returned only 3.8 per cent over the last year, the Brooks MacDonald fund has returned 15.8 per cent.

“While the types of assets that this fund holds can be a bit complicated—convertible bonds, preference shares, structured notes, bond and loan assets, and discounted assets—the goal of delivering positive total returns even when the market falls is straightforward enough.”

Equity funds awarded the rating include the Guinness Global Equity Income, Jupiter Asian Income and Threadneedle UK Extended Alpha funds.

FundCalibre says the rating goes to the top 5 to 10 per cent of funds available to retail investors.

Clive Hale, director at FundCalibre, says two of the funds in particular are suited to income investors as interest rates at rock bottom and inflation now 1.8 per cent.

The Jupiter Asian Income fund, managed by Jason Pidcock and launched last March, has a current yield of 3.9 per cent. It seeks out companies with reliable dividends that can deliver both income and growth for investors.

While the Guinness Global Equity Income fund has a lower yield of 2.8 per cent, Hale argues its total returns are “impressive”. Its 35 equal-weighted stocks means that investments are very different from the benchmark index, Hale says. It has returned 51.1 per cent over five years compared to 43.8 per cent in the Equity International sector.

The final equity fund, the Threadneedle UK Extended Alpha, invests primarily in UK large caps, but seeks to extend investors’ returns via shorting. It has returned 33.5 per cent over three years compared to 19.9 per cent in the UK All Companies sector.