Jayesh Manek: How I beat everyone during volatile summer

An asset manager best known for winning a Sunday Times fantasy fund manager competition before establishing his own investment business has outperformed every one of his peers over the last three months, as markets suffered.

Former pharamacist Jayesh Manek's £40m Growth fund has soared to the top of the UK All Companies sector, losing just 2.5% in the last three months.

He is also top across all sectors during September with the fund up 7.44%.

Manek has been well ahead of his UK All Companies peers over the summer, with the average fund losing 13.6% since the start of July, according to Morningstar.

The manager said he began revamping his portfolio at the end of last year, adding to defensive sectors such as utilities and pharmaceuticals, as he anticipates growth will remain anaemic for a further eighteen months.

He has also been using index futures during the last three months, hedging up to 100% on the majority of stocks, as he anticipated there would be a market correction in July.

He sold completely out of US stocks at the start of the year, which made up 20% of the fund. He used the proceeds to pump money into the utilities and pharmaceuticals sectors- now 30% of the fund.

"In this environment it is the defensive names which will do well. I have been adding to the likes of GlaxoSmithKline and AstraZeneca," said Manek.

"I sold out of US equities at the start of the year as I believe growth will be sluggish for the next eighteen months and high beta plays will suffer."

He said his biggest holding, 10% in the world's largest video search engine Blinkx, has also played a big part in the fund reaching the top of the sector.

However, Manek added performance would have been even stronger had he not sold out of his 4% stake in Autonomy two days prior to Hewlett-Packard making a bid for the group.

"Over the past seven weeks the stock went from 81p to 150p, as the group reported strong results and also benefitted through Autonomy having a 14% stake in the firm.

"I decided to take profits in Autonomy a little too early and sold out two days before the bid, which was disappointing."

Manek famously launched his fund after winning a fantasy fund manager competition in the mid-1990s.

Assets flew into the vehicle, reaching a peak of £300m in 2000, but investors were left disappointed when performance was badly hit by a large exposure to technology stocks.

Performance has been erratic with the fund bottom of the UK All Companies sector over one year and third quartile over three years.

According to Morningstar the fund has lost 21.2% over one year, compared to the peer group average fall of 5.3%.

Over three years the fund is down 24.6%, with the sector average fund gaining 19.6%.