Funds of investment trusts lead MM sector in 2009

Funds of investment trusts dominated the multi-manager performance tables last year, benefiting from the deep discounts which opened up for underlying companies during the market downturn.

Of the top 20 multi-manager portfolios of 2009, 11 were funds of investment trusts, while a further three were focused primarily on Asia/Pacific equities.

Henderson New Star manager Paul Craig had three of the top eight performing multi-manager funds last year.

Craig says his New Star Strategic fund range, along with his top-performing Cirilium portfolios, have rebounded strongly after some holdings were faced with the widest discounts for more than a decade.

“While our managers have performed well on a NAV basis, we have also seen discounts tightening over the past 12 months too,” he says.

“Equity markets across the board got deeply distressed, but the problem we faced during the downturn was in same cases we were seeing 50% discounts on top of a strong NAV fall.”

While investments in hedge, private equity and property vehicles were hit hard due to forced selling, Craig says he took up a number of opportunities which displayed “tremendous potential upside”.

“A lot of investors in the market gave up on these trusts,” he says.

“Share prices on some holdings fell considerably during this period, but while the easy money has been made and NAVs have recovered back to where they were, share prices are still on sizable discounts.

“The Henderson Private Equity investment trust for example, which I used to run at New Star, is still at a 55% discount.”

While Craig says 2009 was a year for capturing beta but now he has moved to add proven alpha generators to his portfolios.

Top Performing MM Funds in 2009

1. Premier Enterprise 56.36
2. Aberdeen Multi Manager Emerging Markets Portfolio 56.1
3. New Star UK Strategic Capital 52.4
4. Stan Life Inv Pacific Basin Manager Of Managers 52.3
5. CF Miton Select Assets 48.61
6. Unicorn Mastertrust 47.45
7. New Star Asia Portfolio 47.26
8. New Star Global Strategic Capital 43.88
9. Skandia IM Specialist High Yield Bond 43.77
10. New Star UK Strategic Income 42.18
11. Jupiter Fund of Investment Trusts 41.33
12. Smith & Williamson MM Global Investment 40.34
13. Jupiter Monthly Income 38.3
14. Skandia IM MM UK Equity 36.55
15. L&G - (Barclays) MultiManager UK Lower Cap S2 36.42
16. Margetts Venture Strategy 36.03
17. Investec Managed Growth 35.05
18. F&C MultiManager Investment Trust 34.99
19. Halifax Fund of Inv Trusts 34.37
20. M&G Managed Growth 33.79

Source: Trustnet, All Data from 01/01/2009-31/12/2009/
Bid-bid basis with net income reinvested.