GAM international growth and Msdw no load global equities are the only funds in the sector to record gains over year to end of august
Global growth is one of the most diverse Autif classifications, with returns varying by 116.61% over the three years to the end of August.
Of the 123 funds in the sector with a three year track record, 95.93% delivered positive returns over the period and the sector rose by 20.51% on average.
However, growth has been more elusive over the shorter term, with funds in the sector dropping on average by 25.31% over the 12 months to the end of August.
Only two of the 149 funds with a year's track record, GAM International Growth and MSDW No Load Global Equities, posted positive growth in this period, up 7.07% and 2.28% respectively.
Quilter Global Growth, managed by Derek Larcombe since launch in 1990, is the sector's top performing fund over the three year period to the end of August, up 111.31%, offer to bid with net income reinvested, compared to a sector average of 20.51%.
The fund is run as a unit trust of investment trusts and is not benchmark constrained. Larcombe likens his investment process to a pyramid and underneath him are the various fund managers chosen for their specific expertise in certain sectors and geographic regions and beneath them, the companies they are invested in.
He is not particularly interested in what holdings the various investment managers have, as it is the fund managers expertise that he is buying into, rather than their basket of stocks. Larcombe places greater emphasis on picking fund managers who display flair and are willing to take a contrarian approach.
He said: 'A lot is said about risk management and my main job is really looking at how people manage money. I am after someone who has flair. Most people go down the scientific route because they have not got those skills and so they all end up with pretty similar results.'
Larcombe's risk management strategy largely revolves around screening the various markets and sectors on a daily basis and looking for what he perceives to be value, based mainly on the discounts individual investment trusts are trading at.
He is currently moving the portfolio into less defensive territory, upping his weightings in small caps as he looks to reduce the high cash position he has held for much of the year.
He is maintaining a high domestic weighting at 64% and almost a third of the fund is still invested in zeros, including Aberdeen's Enhanced Zero Trust and Exeter Progressive Growth.
Gurjit Soggi, manager of the Marlborough International Equity Fund, is also reducing an overweight cash position and upping his weightings in small caps on the grounds that they will outperform in the medium term as markets pick up.
Soggi took the helm of the fund of funds vehicle back in 1999 and maintained its historic growth bias until mid 2000, when he shifted its focus toward a value style. Over the same period, he has also gradually brought the portfolio closer in line with its benchmark, the MSCI World Index, and is now looking to add to his holdings.
Soggi said: 'It is currently quite a focused portfolio of about 17 to 18 holdings but I am looking to increase that to 20 to 21.'
Asset allocation is quite passive, he added, in that it is a composite of the benchmark and peer group averages.
Soggi currently has 44% in the US, 14% UK, Europe 23.5%, 9% Japan, 4.9% Asia ex Japan, 1.72% emerging and 2.5% cash. UK exposure is provided through Marlborough UK Growth and complemented by a holding in ABN Amro UK Growth and a smaller one in Liontrust.
The Standard & Poor's AAA-rated Fidelity Managed International Fund has posted growth of 44.59% over the three years to the end of August outperforming the sector by 24.08%.
The fund, managed by Dick Habermann in Boston, is a global equity vehicle benchmarked against the MSCI World index.
The portfolio is run with a bottom-up stockpicking app-roach and asset allocation calls in terms of geographic bets are limited to within 5% either side of the benchmark.
Although Habermann is the lead manager he is supported by a team of regional fund managers who bring their own individual knowledge and styles of the stockpicking process.
Smears said: 'Stockpicking decisions are made by the five regional sub managers and the lead manager is in control of he asset allocation policy.'
Individual holdings are numerous and diverse and generally comprise a maximum of 3% of the £691m fund.
'The Managed International Fund has 400 to 500 holdings to try and get a picture of the world markets. In the larger sub-portfolios we try and stay close to the benchmark in terms of sectors and add value through stock selection,' Smears said.
The fund returned -28.99% over the 12 months to the end of August, compared to the sector average of -25.26%.
Smears said this was due to it retaining a slight growth bias throughout the calendar year, which resulted in disappointing performance in the first and third quarters.
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