Daniel Hall, Russell/Mellon’s publications and statistics manager, said: “Following the poor performance at the start of the decade, those balanced managers that kept faith with equities have been rewarded.
“A typical balanced pooled fund worth £100m [e142m] at December31, 1999, would have lost around £30m over the subsequent three years. Since the beginning of 2003
however, it would have regained around £21m of those assets, largely due to strong equity performance.”
Neptune’s balanced fund was the top performer of 2004, returning 16.5 per cent, according to Russell/Mellon Caps.
Robin Geffen, chief investment officer at the firm, said: “We have got a good overweight in mainstream Europe. We ended the year with 40 per cent in UK equities, while the average UK weighting was 51 per cent on a numeric basis. We have 24.5 per cent in Europe, which is about double the average.”
The £18.6m fund is also overweight in US holdings, which represent 7 per cent of the portfolio, compared to the average 3.5 per cent. In emerging markets Neptune has made an even stronger call, opting for an 11.2 per cent allocation, while the average competitor allocated merely 2 per cent.
Neptune’s product is also relatively concentrated, containing just 50 holdings. “We do not cling to the benchmark. In the UK part of the portfolio, for example, we don’t hold any of the country’s 10 largest stocks, except for Royal Bank of Scotland.”
Despite its focused nature, the fund is run on a top-down basis. “We look at sectors first,” explained Mr Geffen. This year he is planning to increase the fund’s exposure to Chinese sectors, including petrochemicals, resources (coal and oil) and certain consumer stocks.
The number-one balanced pooled fund over three years was that of GLG Partners. The £133m fund notched up over 11.7 per cent, particularly impressive when compared with the median for the sector, which was 2.4 per cent. The fund invests in equities, bond and cash, and allows up to 50 per cent of the portfolio to be exposed to equities around the world.
The worst performer was KBC Group, formerly Ulster Bank, whose balanced vehicle, worth £8.6m, came bottom over one and three years, returning 5.6 and -2.6 for the respective time periods, according to Russell/Mellon.
RM
