Moneywise Fund Awards 2011

29 November 2011

It hasn't been a great year for investors. Across the globe, economic concerns, natural disasters and banking crises have led to rollercoaster stockmarket returns.

But there are funds that have weathered the storm.

The Moneywise Fund Awards seek to highlight those funds that have outshone their competitors and consistently delivered top performances whatever the economic weather.



HIGHLY COMMENDED: Standard Life UK Equity Unconstrained

COMMENDED: Liontrust Special Situations, Rensburgh UK Mid Cap Growth, Royal London UK Mid-Cap Growth

Uncertainty over the future for the UK economy has seen investors abandon the UK All Companies sector in their droves - it was the worst selling sector of 2010, according to the Investment Management Association. "Developed markets such as the UK are often overlooked in the rush for emerging market growth," explains Danny Cox, head of advice at Hargreaves Lansdown.

"But there are many UK companies that derive a significant proportion of their earnings from faster-growing overseas economies," he says, suggesting the sector can still provide plenty of opportunities.

This year's winner is Legal & General's UK Alpha fund. Impressive growth - with returns of 77.83% over five years compared to a sector average of just 1.29% - sent the fund to the number one spot.

"This is a high-quality fund with an investment mandate that allows the manager, Richard Penny, the freedom to invest in any UK-listed company in which he sees value," says Gavin Haynes, the managing director of financial adviser Whitechurch Securities.

The runner-up in this category is Standard Life's UK Equity Unconstrained fund, which has performed well since stockmarkets bottomed out in March 2009.

The manager Ed Leggett "has exploited overly negative sentiment in the recovery phase," says Haynes.



HIGHLY COMMENDED: Marlborough UK Micro Cap

COMMENDED: Cazenove UK Smaller Companies, Investec UK Smaller Companies, Standard Life UK Smaller Companies

This was one of the best-performing sectors last year and there are "many quality fund managers and exciting companies in this area of the market," says Cox. It is more volatile than the UK All Companies sector, as for a company to qualify it has to be in the bottom 10% of the market in terms of size.

But "for investors seeking exciting growth prospects, investing in smaller companies can provide good opportunities," says Haynes. The companies in this sector are likely to be ones you've never heard of, but they could be the Google of tomorrow, making it an exciting sector to invest in.

Our winner in this sector is Close Special Situations. "Returns have been exceptional from this fund, with particularly strong returns achieved from companies involved in mining," says Haynes.

He adds: "The fund is an aggressively managed smaller companies fund and not for widows and orphans. The fund manager takes large positions in favoured companies and you need to accept potential for high volatility."

The runner-up in this sector is the Marlborough UK Micro Cap fund, which benefits from having a team of managers with "a wealth of experience," says Haynes. By focusing on very small firms with significant growth potential, it has achieved impressive returns.




COMMENDED: Halifax Corporate Bond, Fidelity MoneyBuilder Income, Henderson Long Dated Credit

This sector has been very popular in recent years as investors seek out decent income in a low-interest market, it was the biggest-selling sector in September.

Funds in this sector invest in corporate bonds - loans provided to companies in return for regular fixed-interest payments, plus the return of the investors' capital when the bond matures. Their nature means that corporate bond funds tend to pay a decent yield but not offer huge amounts of capital growth - but some of them buck this trend.

For example, this year's winner, M&G's Strategic Corporate Bond, fund pays a yield of 3.9% and has delivered 46.01% growth over the past five years. "This is a great return for a low-risk fund," says Geoff Penrice, a chartered financial planner at Honister Partners.

It is a defensively-managed fund that focuses on investing in high-quality investment grade corporate bonds. Managed by the very experienced Richard Woolnough, the fund has secured the top spot in the Corporate Bond category for three years in a row.

Woolnough also manages our runner-up, the M&G Corporate Bond fund. "Woolnough's defensive positioning during the difficult periods for bond markets has been impeccable, while he has also done well to capture strong returns in the corporate bond rally that commenced in 2009," says Haynes.



HIGHLY COMMENDED: Troy Trojan Income

COMMENDED: CF Walker Crips Equity Income, IP High Income, Aviva Investors UK Equity Income

This year's winner, the Unicorn UK Income fund, has been managed since launch in 2004 by John McClure. Holdings such as investment manager Brewin Dolphin have helped the fund achieve impressive growth of 81.66% over the past three years - double the next best performer in the sector.

Our runner-up is the Troy Trojan Income fund, which currently yields 4.4% and has returned 35% over the past five years. The fund is "an excellent defensive choice for investors," says Haynes.



HIGHLY COMMENDED: CF Miton Special Situations Portfolio

COMMENDED: CF Miton Strategic Portfolio, Newton Balanced, Henderson Enhanced Balanced

Funds in the balanced managed sector have a broad investment remit - they can invest in a range of assets as long as no more than 85% of the fund is invested in equities.

This is attractive to investors as they can access a diverse range of investments within a single fund.

Our winner, the Ruffer European Fund, has performed fantastically with returns of 72% over five years. Fund manager Timothy Youngman has "added value by not being afraid to hold safe haven investments, including gilts and gold, during periods of market turmoil," says Justin Modray, owner of financial advice website

"This fund gives stable returns and avoids the rollercoaster ride of some of the more volatile funds," adds Penrice.

The runner-up, CF Miton Special Situations, has taken the number two spot for the second year running. Haynes says it's an "excellent cautiously-managed fund". He adds: "The manager, Martin Gray, is known for his bearish stance, which in the current difficult investment climate has worked well for investors."



HIGHLY COMMENDED: Jupiter European

COMMENDED: BlackRock Continental European, Threadneedle European Select, Ignis Argonaut European Alpha

With Greece teetering on the brink of bankruptcy and Italy and Spain facing debt crises, it's hardly surprising that the Europe excluding UK sector was the worst selling in the last quarter. But, in fact, there are companies here that can offer investors real value, and many funds in this sector have delivered excellent returns.

For example, our winner, BlackRock European Dynamic, has returned almost 45% in the past three years, despite the problems plaguing the continent. The key to its success is manager Alister Hibbert's "focus on European firms with a high level of exposure to growth in emerging markets," says Cox.

Our runner-up, the Jupiter European fund, has also produced exceptional returns with growth of 34.35% over three years. Haynes comments: "The manager, Alex Darwall, is given the freedom to position the portfolio with significant differences to country and sector benchmarks. He focuses on large, well-managed firms and the fund is a good core European holding."



HIGHLY COMMENDED: AXA Framlington American Growth

COMMENDED: Threadneedle American, Schroder US Mid Cap, Henderson US Growth

The US government appears to be managing to stimulate growth, but its budget deficit is now trillions of dollars and the trade deficit is widening. All of this has made investors wary of the North America sector, but there are decent investments out there - after all some of the world's most innovative and profitable companies call America home.

Our winner is the Neptune US Opportunities fund. "The US stockmarket is notoriously difficult for fund managers to outpace, so manager Felix Wintle deserves credit for beating the S&P 500 over the six years he has run this fund," says Modray.

"But his aggressive approach has meant a bumpy ride, with exceptionally good years followed by less impressive periods, although he appears to be taking a more defensive stance in recent times."

The runner-up is the equally well-respected AXA Framlington American Growth fund. The fund manager Steve Kelly "has a strong track record of investing in high-quality growth businesses in the US stockmarket," says Haynes. The fund is a good choice for anyone wanting exposure to large US equities, including Apple and Google.



HIGHLY COMMENDED: Newton Asian Income

COMMENDED: First State Asia Pacific Sustainability, First State Asia Pacific, First State Asia Pacific Leaders

This year hasn't been great for Asia Pacific investments. China's soaring growth has stalled, with investments in the country managing only lacklustre returns and India's stockmarket has experienced sharp falls.

But that doesn't mean the area is a no-go for investors. "The fundamental reasons for investing in many of these markets remain," says Cox. They have just been hit in the short term by wider global concerns. "Any falls in these markets could provide a good long-term buying opportunity."

The Aberdeen Global Asian Smaller Companies fund has taken the prize in this sector with returns of 243% over seven years. The fund is managed by a "well-resourced and stable investment team, all of whom are based in the Asia Pacific region," says Haynes. "This fund is well worth considering for any investor wanting exposure to emerging businesses in Asia."

Our runner-up is the Newton Asian Income fund, which gives exposure to dividend-paying companies in Asia. The fund has "proven defensive in falling markets," says Haynes, while also producing "pleasing total returns" over the long term.



HIGHLY COMMENDED: First State Global Emerging Markets Leaders

COMMENDED: Aberdeen Global Emerging Market Equities, First State Global Emerging Markets, Baillie Gifford Emerging Markets

Investors looking for long-term gains continue to put their money into the emerging markets sector. For anyone "looking to exploit the global shift of economic power away from the Western developed economies, this sector provides exposure to diversified emerging market funds," says Haynes.

The Aberdeen Emerging Markets fund has won the Moneywise Fund Awards for two years running, which is hardly surprising given its "good, consistent performance," says Penrice. It's an excellent choice for anyone seeking emerging market exposure as it is run by "one of the most experienced teams in the sector".

The First State Global Emerging Markets Leaders fund is the runner-up in this category. It's a "consistent performer" thanks to its management by First State's "very strong and experienced Asia and Emerging Markets desk," says Penrice.



HIGHLY COMMENDED: IP Global Smaller Companies

COMMENDED: Fidelity Global Consumer Industries, Rathbone Global Opportunities, Ecclesiastical Amity International

With the European economy rarely off the front pages this year, it is hardly surprising that the Global sector has been popular. One of the best ways to protect your wealth is to diversify - and global funds are a simple way to do this.

This year's winner is the First State Global Resources fund, which has consistently outperformed its rivals - it has achieved 69.22% capital growth over the past five years. It has "exploited the bull market in commodity prices over the past decade to great effect," says Haynes.

But its heavy focus on commodities means "investors need to be prepared to accept a high level of volatility".

This sector's runner-up is Invesco Perpetual's Global Smaller Companies fund. The management team are "playing a very smart game," says Nick McBreen, an IFA for Worldwide Financial Planning.

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