It's been a strong start to the year for stock markets, which have rebounded from their heavy sell-off at the end of 2018.
Here we highlight 10 fund managers riding high on the renewed buoyancy as they rise up the Citywire Fund Manager Ratings.
Of those featured, nine have moved up to Citywire's top AAA rating thanks to their performance across a host of assets including technology stocks, bonds, US shares and convertible bonds.
Click through to see which managers are on the up this month.
To see all the slides on the same page, click here.
Polar Capital Global Technology has been at the top of the league tables for a decade, and all four of its fund managers have moved up to Citywire’s top AAA rating this month.
Nick Evans, Ben Rogoff, Fatima Iu and Xuesong Zhao have all moved up from our AA rating this month, and their fund is among the best of the last decade, up a stunning 582% in a stellar 10 years for technology stocks.
As is typical with technology funds, the majority of the portfolio is focused in North America – with three-quarters invested in the US and Canada – and the top 10 is a who’s-who of top tech stocks, including Microsoft (MSFT.O), Amazon (AMZN.O), Apple (APPL.O), and Google owner Alphabet (GOOGL.O). Non-US based stocks making up the top 10 include Hong Kong-based Tencent (0700.HK) and Chinese e-commerce giant Alibaba (BABA.K), although the latter is listed in the US.
While the fund has capitalised on the adoption of smartphone technology and cloud computing over the past 10 years, the team is expecting ‘compelling productivity gains from new enterprise technologies to drive investment in the digitisation of businesses, connected industrial devices, and smarter, automated decision-making leveraging artificial intelligence over the next decade’, they said in their latest annual report.
Volatile markets have hit performance of the M&G Managed Growth fund in the past year but manager David Fishwick’s longer term performance has earned him our top AAA rating.
Fishwick’s 4% loss over the past 12 months places the fund in the bottom half of the Investment Association’s Flexible Investment sector, but over three years, a 45% return places him right towards the top.
Fishwick invests mainly in other M&G equity funds, coupled with some exchange-traded funds exposure. Global funds accounted for 61% of the fund at the time of the fund’s last annual report at the end of October, with Asian and Japan funds making up 15.8% and US funds 23.7%.
Although his performance has recently dipped, Fishwick thinks equities are still ‘attractively valued’ compared to other asset classes and the recent sell-off means they have ‘significant potential to recover from currently depressed valuations’.
‘Despite some weakness in macroeconomic data, we believe the current negative investor sentiment is excessive and that the global environment appears supportive overall for equities,’ he said.
David Keetley and Stephen McCormick have earned a top AAA rating for their strong track record investing in convertible bonds through their Polar Capital Global Convertible fund.
Convertibles are types of bonds that can switch to equity in the issuer, usually at the discretion of the bondholder. Keetley and McCormick have been running the fund since its launch just over five years ago, returning 53.7% over that period.
The fund sits outside the Investment Association sectors, though it finds a place in Citywire’s own Convertibles Global Sector. Over three years to the end of January it delivered 16.1%, placing fifth of 23 funds in the sector, while its return since launch has beaten the index’s 35.6% to the end of January, according to the latest factsheet.
In their latest annual report, the managers said their fund was set for strong performance amid volatile markets.
‘Uncertainty, be it geopolitical, macroeconomic or monetary policy related, we believe is prime for convertibles to be chosen as the optimal vehicle for a company to raise capital or for an investor to invest capital,’ they said.
Patrick Vogel, who last year took over the running of the Schroder Strategic Bond fund, has returned to the top AAA rating, which he has enjoyed for the bulk of his fund management career, this month.
Vogel, who began running funds in 2010, earned his first triple-A rating in October 2015, and has rarely dipped below top status, only falling to AA status for five months, including a three-month stint that ended this month.
That stellar ratings history is due largely to his performance on a host of Schroder’s Luxembourg-based bond funds. Vogel’s strong long-term track record meant he was the obvious candidate for Schroders to turn to when another of its bond stars, then Citywire AAA-rated Michael Scott, left to join Man GLG last year.
Investors in the Schroder Strategic Bond fund will be hoping Vogel can replicate his performance on the Luxembourg mandates with his new fund.
In his latest update, Vogel struck a cautiously optimistic tone. ‘We still think European investment grade valuations afford scope for further favourable repricing in the event of positive developments on a resolution to US-China tensions, around which optimism is growing, or indeed signs of stabilisation in either China or Europe itself,’ he said.
Slater’s promotion was helped by his work on the Baillie Gifford Long-Term Global Growth fund, a fund for US investors managed along the same lines as the Scottish Mortgage (SMT) investment trust, and the Baillie Gifford US Equity Growth fund, which is a version of the Baillie Gifford American fund available to US investors.
The Baillie Gifford American fund has racked up a stellar performance, topping the Investment Association’s North America sector over both three and five years, up 107.7% and 156.9% respectively.
The £1.9 billion growth-focused fund, whose biggest holding is in Amazon (AMZN.O), was hit hard by the sell off last October but the team still believes ‘the world’s most largest and most innovative economy will continue to create many of the world’s most exciting growth companies; companies that exhibit a distinctive culture, large growth opportunity, and sustainable competitive advantage’.
In particular, the fund bought into a number of healthcare stocks last year, as ‘there is huge unmet need in healthcare, and there is lots of room for improvement’. This includes new holdings in Denali Therapeutics (DNLI.O), which is looking for cures for neurodegenerative disorders like Alzheimer’s, tumour therapy company Novocure (NVCR.O), and medical devices group Penumbra (PEN.N).
Matthew Tillett has floated between a Citywire A and Citywire AA rating for the bulk of his nine-year fund management career, yet our top rating has remained elusive for the manager of the Allianz UK Opportunities fund.
Tillett has moved up to a Citywire AA rating this month thanks to his solid record on the fund, which places towards the top of the Investment Association’s UK All Companies sector over three and five years.
Tillet has been steadily building his exposure to stocks focused on the UK domestic economy as valuations have deteriorated on Brexit fears, adding real estate companies Land Securities (LAND), Helical (HLCL), and Palace Capital (PCA) last year.
Domestic stocks now account for 45% of his fund. ‘The draconian nature in which investors have discounted domestic UK assets has made it is possible to be very selective without having to pay high valuations,’ he said in his latest update to investors.
‘For example, in the consumer sector, portfolio holdings such as Howden Joinery (HWDN), DFS Furniture (DFSD), Eurocell (ECEL) and Ten Entertainment (TEG) are all market leaders in their respective industries, benefiting from favourable competitive dynamics with good long term growth prospects. All are selling at knock down valuations.’