Fund of funds performance data

Average returns in the Investment Management Association Active Managed sector (funds of funds only) have seen a significant jump over one and three years compared with the last time we reviewed the sector (June 27). The sector mean has jumped from 15.66% over 12 months to June 20, 2005, to 25.06% over 12 months to July 25. And over three years the increase in average returns is even more significant, rising from 18.31% to 42.72%.

However, despite the gain in the sector as a whole, the top two performing funds over one year have not changed, with Pru Growth and M&G Managed Growth holding on to the two top spots. Margetts Venture Strategy has moved up from fourth to third at the expense of Investec Managed Growth. Over one year to July 25 the 5m fund, managed by Toby Ricketts, returned 33.16%.

The move of the Abbey National Multi-Manager Growth fund into the IMA Balanced Managed sector this month has had little effect on the order of rankings in the Active Managed sector compared with last month. Ranked 22nd in the sector over one year last month, the removal of the Abbey fund, managed by John Kelly, reduces the number of funds with a one-year track record to 30. However, as the fund was launched only 18 months ago, its change of sector has not affected the three-year rankings.

One of the largest movers in the sector over one year is the Credit Suisse Premier Fund of Funds Portfolio Growth fund. The fund, which was taken over by Credit Suisse from former manager Artemis, is ranked seventh this month – up nine places from 16th last month. Managed by Robert Burdett and Gary Potter, the 18.9m unfettered fund of funds has as its top three holdings the JO Hambro Capital Management UK Growth fund, Merrill Lynch UK Dynamic and Majedie UK Opportunities.

Over three years there is no change in the positions of the four top-performing funds, with M&G Managed Growth holding on to first place. Managed by Graham French, the M&G fund returned 62.37% over the time period to July 25 – 26.39 percentage points higher than the 35.98% gain it made over three years to June 25.

Replacing Richard Peirson’s Framlington Managed Portfolio in fifth place is the New Star Active Portfolio. Formerly the New Star Performance Portfolio, the fund, which is managed by Mark Harris and Craig Heron, is not confined to investing in any particular economic sectors or geographical regions. Indeed, as at the end of May this year 49.6% of the portfolio was held in British equities, 11.2% was in America, and 10.5% was held in cash. The rest was held in Japan, Europe, Asia Pacific, and other equities.

The difference between the best-performing fund and the worst-performing fund over three years is much more pronounced than the difference over one year. Over three years the difference is 36.41%, while over one year it is 15.54%.

Over one year the Invesco Perpetual World Growth Portfolio fund (profiled opposite) fell from sixth place last month to 10th place this month. Over three years it slipped from seventh in the ratings to ninth, following a return of 46.04%.

Percentage returns, volatility and fund size for funds of funds in the IMA Active Managed sector, bid-bid, net income reinvested.Source: Standard & Poor’s