Kingswood Law Investment Committee Quarterly Review Meeting

Transcription

1 Kingswood Law Investment Committee Quarterly Review Meeting Date 4 June 2008 Meeting Opened hrs Present Kevin Whelan (Kingswood Law), Brian Bennis (Kingswood Law), Stuart Killacky (Kingswood Law), Garry Whelan (Kingswood Law), Ben Simpson (Skandia/Selestia) Apologies None Corporate Actions arising since the last meeting None Forthcoming Corporation Actions to be considered None Fund Review The following tables summarise the present Managers and Funds, which are used to create the Kingswood Law 10 Portfolios. Each fund will be compared against others in its Investment Manager Association Sector and a decision will be made to retain or replace it. The funds are chosen from those available through Skandia s Selestia Investment Solutions, which currently comprises about 70 Managers and almost 1,000 funds. The fund selections are made in line with Kingswood Law s Investment Process, which is published on our website at this address: After a thorough review of the market s analysis tools and the information available on funds, the Investment Process was reviewed and updated since the last meeting. The fund selections below have been made using the updated Process. Class Cash/Money Markets Sector Money Market Manager Jupiter Fund Cash Review This fund has the highest Information Ratio and the lowest volatility in the Sector.

2 Class UK Fixed Interest Sector UK Zeros Manager New Star Fund Diversified Absolute Return Review This fund has an average Information Ratio and average volatility. It ranks above average compared to others in this sector over the longer term, featuring in the top quartile over 24 and 36 months. Class UK Fixed Interest Sector UK Index-Linked Gilt Manager M&G Fund Real Yield Review It has the highest Information Ratio of this Sector. It s currently in the top quartile over the last 12 months and the second quartile over 24 and 36 months. It has low volatility for the Sector, meaning that it s delivering its returns without taking excessive risk. Class UK Fixed Interest Sector UK Other Bonds Manager Artemis Fund High Income Review This fund continues to do very well. It has an AA rating from OBSR. It has the fifth highest Information Ratio from 32 funds, performing in the top quartile over two and three years. Class UK Fixed Interest Sector UK Corporate Bond Manager Invesco Perpetual Fund Corporate Bond Review It continues to enjoy the highest rated AAA OBSR rating. Its Information Ratio has improved since the last quarter to now be the highest of 41 funds in this Sector. It continues to deliver above average performance over the last two years. Class Property Manager Norwich Fund Property Trust Review The credit crunch is still affecting the property Sector, which remains low due to lack of confidence. To protect remaining investors, those who make early withdrawals continue to suffer an additional penalty, which has the effect of further depressing the price. Portfolio planning is about the long term view and our recommendation is not to sell now, thus consolidating the penalty. By retaining this investment, when confidence returns, not only will the price rise, but it ll be further boosted by the removal of the early redemption penalty.

3 Class Property Manager New Star Fund Property Review The observations made for the Norwich Property Trust above apply equally to this fund. This fund focuses mainly on London and the South East, whereas the fund above has a wider spread of property investment. The good news from both these funds is that you could sell if you want too: there are many UK property funds that not only have imposed severe penalties, but have also imposed time limits of up to a year to wait until the money will be released. In some cases, some funds will simply not allow withdrawals. For these reasons, we re confidently recommending these two funds should be retained. Sector UK All Companies Manager M&G Fund Recovery Review This fund has the top AAA rating from OBSR. New to us last quarter, it has now strenthened its position to enjoy the second highest Information Ratio of an increased Sector of 142 funds. It also has among the lowest volatility. It s delivered above average performance for each of the last three years, coming in the top quarter in both the last year and over three years. Sector UK Smaller Companies Manager BlackRock (formerly Merrill Lynch it changed its name) Fund UK Smaller Companies Review It s one of only 3 funds with an AAA OBSR rating in a Sector of 34 funds. Its fund manager has an A Citywire rating. It s now improved its position to second in this Sector. It s delivered top quartile performance over two and three years. Sector UK Smaller Companies Manager Old Mutual Fund UK Select Smaller Companies (this is a closed fund) Review The fund manager continues to enjoy a AAA Citywire rating and now delivers top quartile performance over 2 and 3 years. Investors who have money invested in this fund should continue to hold this fund. Sector UK Equity & Bond Income Manager Jupiter Fund Monthly Income Review The fund manager has an A rating from Citywire. It retains the highest Information Ratio in the Sector. Its performance has been above average for two and three years.

4 Sector UK Equity Income Manager Invesco Perpetual Fund Income Review This fund remains a really good choice. It has the highest AAA rating from OBSR and AA from Citywire. It has the second highest Information Ratio from an increased Sector of 50 funds. And it has top quartile performance over 24 months, and second quartile performance over 12 and 36 months. Class Far East Ex Japan Sector Far East Excluding Japan Manager Fidelity Fund South East Asia Review New to us last time, this fund continues to do very well. The fund manager has an AA rating from Citywire. It has the eighth highest Information Ratio in the increased Sector of 44 funds. It features in the top quartile over 24 months and 36 months and above average over 12 months. Class Japanese Sector Japan Smaller Companies Manager M&G Fund Japan Smaller Companies Review All the funds in this Sector continue to perform poorly, as the Sector as a whole remains in the doldrums. However, this small Sector only represents a tiny holding in some of the highest risk portfolios, so exposure in this area is very limited. Switching now would mean consolidating losses, so our advice is to do nothing for the time being. Class Japanese Sector Japan Manager AXA Framlington Fund Japan Review Its Information Ratio is pretty much on the average for this Sector of 30 funds. Its performance over two and three years continues to be above average. Six months ago, we were watching SG Japan CoreAlpha but decided not to continue to do so at the last meeting, simply because that fund wasn t performing significantly better than our current choice. However, Japan is a particularly volatile market, evidenced by the fact the SG Japan CoreAlpha fund has again come up on our radar. However, we re not sufficiently confident in recommending a switch at this time, but we have reinstated it as one to watch. It highlights the point that making changes over relatively short term intervals may not always be right, particularly against the fact that portfolio planning is all about the longer view. Watch SG Japan CoreAlpha

5 Class European Sector European Smaller Companies Manager Henderson Fund European Smaller Companies Review The fund manager enjoys an A rating from Citywire. This fund maintains its good returns, delivering top quartile performance over 24 and 36 months. It has the 6th highest Information Ratio. Class European Sector Europe Excluding UK Manager Neptune Fund European Opportunities Review This fund continues to deliver excellent results. It has an A rating from OBSR. Of the increased Sector of 73 funds, it has the second highest Information Ratio. It retains its position in the top quartile for each of the last three years. Class North American Sector North America Manager Martin Currie Fund North American Review Newly recommended at the last meeting, this fund continues its strong performance. It has an AA rating from both OBSR and Citywire. It has the second highest Information Ratio. It s been firmly resident in the top quartile over one and two years, and in the second quartile over three years. Class North American Sector North America Smaller Companies Manager Schroder Fund US Smaller Companies Review In this small Sector of just 7 funds, it s the only fund with an AA rating from OBSR. It has the top Information Ratio and the lowest volatility. It s produced top quartile performance over 12 and 36 months and above average returns over 24 months. Class Global Specialist Manager JPM Fund Natural Resources Review Providing exposure to commodities, this fund continues to do well, with an AA rating from OBSR and an A from Citywire. It has the fourth highest Information Ratio out of 24 funds in this Sector. It s delivered top quartile performance over each of the last three years, strenthening its position since last time.

6 Class Global Specialist Manager Neptune Fund Global Equity Review Another of our new arrivals last quarter, it s still the top fund in this Sector of 75 funds. Proving it s pedigree, it has an AA rating from OBSR and an AAA rating from Citywire. It continues to be placed in the top quartile for each of the last three years. Class Emerging Markets Sector Global Emerging Markets (Specialist) Manager Jupiter Fund Emerging European Opportunities Review It s one of the few funds with an AA rating from OBSR. It has improved it s position since last time to have the top Information Ratio of 21 funds in this Sector. It s returned top quartile performance over one and three years. Factsheets for all these funds can be downloaded from our website at Date of Next Meeting 3 December 2008 Meeting Closed hrs