The four young multi-asset funds shooting the lights out after their first three years

Multi-asset funds run by JO Hamro Capital Management, Premier Miton and AJ Bell are among the funds launched in 2018 that have made top-quartile returns over the past three years, according to data from FE Analytics.

Investors typically wait for a fund to prove its mettle before buying in, which usually involves hanging on until the portfolio has three years of track record to evaluate.

Those that do this will avoid some of the funds that never live up to their potential, but will also miss out on some of those that get off to a storming start.

Having previously looked at the young US funds, this time around Trustnet examines at the multi-asset portfolios that have made strong gains in their first three years.

Two funds from the IA Flexible Investment sector made the list. First up is the MI Hawksmoor Global Opportunities fund, which has returned 43.5% over three years.

Launched in September 2018, managers Ben Conway and Daniel Lockyer have gone against the grain among their peers – which usually invest heavily in equities.

The £39.5m fund-of-funds is 52.1% invested in portfolios that buy stocks, but has 21.3% in real assets and 12.9% in private equity with a further 9.8% in resources such as precious metals.

Private equity investment trust Oakley Capital Investments is its largest holding at 5.6%, while Polar Capital UK Value Opportunities and Jupiter Gold & Silver are second and third respectively. In total, these funds account for 14.6% of the total portfolio.

Performance of funds vs sector over three years

Source: FE Analytics

Also from the IA Flexible Investment sector, VT AJ Bell Global Growth came in just behind its Hawksmoor peer, making 42.7% over three years.

Launched in June 2018, the £123.8m fund has made its returns by investing in a range of low-cost passives, with Lyxor Morningstar UK ETF its largest weighting at almost 19% of the portfolio.

Vanguard S&P 500 ETF and HSBC MSCI Emerging Markets ETF round out the top three, which between them account for 45.6% of the portfolio.

More typical with funds in the flexible sector, the portfolio has a 91.5% weighting to equities with 3% in fixed income and 3% in alternatives.

Further down the risk scale, in the IA Mixed Investment 40-85% Shares sector Premier Miton Balanced Multi Asset, which is to be renamed the Diversified Sustainable Growth fund as of 1 March, has started strong.

Since its launch in January 2018, the £6.4m fund has made 40.3%, a top-quartile effort among its peer group. The portfolio is 63.5% weighted to equities – in the middle of its allowed range – with around 10% in property, 10% in fixed income and 9% in alternatives. It also has a higher cash weighting of 7.3%.

The fund is already invested with environmental, social and governance practices in mind, with its top holdings including Vestas Wind Systems and SolarEdge Technologies.

Among non-equity investments, BH Macro, the long-short investment trust, is the portfolio’s biggest weighting at 3.6%.

Neil Birrell, manager of the fund, said: “The fund’s portfolio will not change as a result of this and so there will be no costs involved.

“The investment strategy of the fund has always been to identify long-term structural changes or themes that are taking place in economies or society and to build a directly invested multi asset portfolio around those.”

Performance of funds vs their sectors over three years

Source: FE Analytics

Last up is the £128.6m JOHCM Global Income Builder fund, which launched in May 2018 and has made 27.9% over three years – a top-quartile ranking in the IA Mixed Investment 20-60% Shares sector.

Despite the limit on equities, currently the fund has 70.3% invested in stocks, split 32.7% among US equities and 37.6% among those from elsewhere. It has 19.7% in fixed income and 6.4% in cash, with 3.5% in gold.

The fund, which aims to provide a “persistent stream of income” alongside capital growth, holds 101 equity positions, with technology and financials the two largest sector weightings, alongside 34 fixed income positions.