Little known boutique funds are outperforming the big name fund houses research suggests.
According to investment data analyst Moneyspider.com funds in the global growth sector currently offer the best chance of returns.
The firm says it is the boutique funds in the sector which are proving to be the most lucrative.
Moneyspider managing director Bill Ross points out the Global Growth IMA sector has been dominated by the Neptune Global Equity fund for the past five years.
He highlights a £5,000 investment in the fund would have made a profit of £8,071; a gain of more than 160% over the period.
Ross also points out another top performing boutique fund, Rathbone Global Opportunities, has also delivered substantial profits of £6,086, growth of over 120% since 2002.
To back up his point, Ross says the same amount invested in the Scottish Widows Global Growth fund would have produced a derisory profit of just £662.
“This dramatic imbalance in returns shows the importance of not automatically putting your trust in the big name fund management houses,” he says.
“Small houses such as Rathbone and Neptune can seriously reward investors who are prepared to consider unfamiliar or even unknown names.”
Ross says the case for focusing on top boutique houses is further strengthened by Fidelity’s announcement its own multi-manager team does not hold any of its UK funds within its range as it prefers to back funds from boutiques.
Moneyspider says the most popular IMA sector is UK All Companies, which currently holds the lion’s share of investors’ ISA money; 31% of all ISA investors hold £13bn under management in this area.
“Investing money in the right funds within the UK All Companies sector would have generally produced good returns,” says Ross.
“However, the top performing portfolios would have had a good cross sector of funds and geographical exposure, so global growth is likely to be a key component in asset allocation going forward,” he adds.
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