Schroder multi-manager range
Schroders’ multi manager team is another with a longstanding aversion to US equities. Their Diversity Balanced fund, for example, has no exposure at all, other than that held within a 14 per cent weighting to global equity strategies.
Instead, the managers have focused on UK value funds, as well as alternatives such as Majedie Tortoise.
Alternative funds as a whole make up the largest single asset class weighting in the portfolios. By contrast, the flagship Diversity fund takes a limited equity exposure relative to its peers. These moves have meant the recent renaissance for US tech, in particular, has begun to hurt relative performance again.
Premier Miton Diversified range
The Premier Miton group has a wide range of multi-asset offerings, but the Diversified funds run by Neil Birrell have proven most adept at capturing returns over the past year.
Unlike the other offerings mentioned above, the stragies do have a material exposure to US equities – running to almost a quarter of its Diversified Growth fund, for instance. The portfolios are directly invested, which means this weighting is typically in the form of tech shares like Microsoft and Nvidia.
But the asset manager’s separate fund-of-funds range has also performed strongly, and these strategies have done so without looking to the US. The Multi-Asset Global Growth fund holds 90 per cent in equities, but just 7.4 per cent of the portfolio is held in the US. Instead it looks to UK strategies like Evenlode Income, and a healthy weighting to some of the most popular Japanese equity funds.
The future
The value rally's recent stumble has seemingly affected some of these portfolios: the Momentum and Schroder funds are back in the fourth quartile on a three-month view, although the Chelsea and Premier Miton offerings have continued to outperform.
In any case, no adviser will be basing their fund selection decisions on a single quarter’s worth of performance. But some intermediaries will nonetheless be cheered by the sight of a renewed uptick in performance for lower-cost options.
Most funds in Vanguard’s LifeStrategy range, for example, have posted better numbers since the spring - likely helped by the government bond rally. As ever, advisers will be weighing the likelihood of delivering appropriate returns to clients versus the overall cost of the portfolios they choose.
