Young pretenders: Six funds poised to make a sales splash

by | Oct 12, 2022 | Distribution, Feature, Fund Managers

Top-performing funds can shake up the status quo when they hit three years old. Frank Talbot picks his ones to watch each month.

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For funds, life begins at the age of three. That’s when you accumulate a performance track record and enough business to avoid your group pulling the plug. It’s also the earliest time that most fund selectors will consider a strategy for their buy lists.

Not every fund reaches this landmark in the same shape. Some have lit up their sectors with performance, while others limped over the line. Meanwhile, some sales departments will still be sweating over every dollar of assets under management, as others reach three years ready to steal market share from incumbents.

Each month Citywire Amplify will highlight funds that have recently crossed the threshold and turned in top-quartile performances in the process.

Search the table to view our pick of the funds coming of age.

There is some good news for beleaguered H2O Asset Management, as its $65m Eurosovereign bond fund delivered top-percentile returns over three years to the end of September in the EUR Government Bond category. However, it’s not quite time to break out the Veuve Clicquot, as it’s only registered for sale in France – quel dommage!

Hedge fund shop Brevan Howard has returned 25% to investors in its global macro Absolute Return Government Bond fund and has scooped up $2.1bn of assets in the process. With Alternative Ucits strategies enjoying a renaissance in the market turmoil, it’s easy to see that figure getting even bigger from here, particularly with its focus on fixed income.

The $2bn Janus Henderson Global Sustainable Equity fund has also brought home the bacon, rising 35.3% in sterling terms. That is good enough for a place in the top decile of the Global Flex-Cap Equity sector over the past three years.

Schroders’ $380m Luxembourg-domiciled Healthcare Innovation fund is another portfolio putting in top percentile returns, with gains of 42.7%, compared with a 31.1% bounce in the MSCI World Health Care index. It should be noted that much of that alpha was generated in the first few years of the strategy. Year to date it has suffered, alongside the sector, with losses of 23%, versus 16.1% for the index.

EM debt dynamos

A couple of emerging market debt funds are vying for investors’ attention. In this space, the name of the game has been more about damage limitation than upside. The $640m Invesco Emerging Market Local Debt fund has been a real success and limited losses to 5.6% over the past three years in euro terms.

Next up is just what the world needs: another Pimco Bond fund, in the shape of the $230m Ireland-domiciled hard currency Emerging Market Opportunities run by the same team that helms the US version of the strategy. It has come to maturity and done a fine job, restricting losses to just 4.9%, comfortably ahead of the 20% decline in the JPM EMBI Global Diversified index.

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