“There is not a great of choice of financial funds,” says Rowan head of research Tim Cockerill, “but among the few ones out there, the choice is an easy one.”
The Jupiter financial opportunities fund, managed by Philip Gibbs, has been the darling of IFAs for more than a decade. “Gibbs pretty much beats everything else, so it is an easy decision,” says Cockerill.
According to Jupiter, the fund has delivered 839.68 per cent against its benchmark, the FTSE Financials index, which has returned 47.6 per cent since the fund’s launch in June 1997.
“Philip Gibbs is an active manager who is not drawn to follow the consensus and is prepared to take positions other managers would shy away from,” says Cockerill.
Panellists have throughout described Gibbs as an active manager who makes extremely accurate calls, especially in negative markets, and as a manager who has used the rules of unit trusts to the fullest.
City Asset Management chief investment officer Hilary Coghill says Gibbs recently allocated 3 per cent of his portfolio to Hong Kong property.
Panellists have described the move as variously “somewhat unusual”, “surprising” and “a bit odd”.
Cockerill says the portfolio of the Jupiter financial opportunities fund had at one point nearly 80 per cent in cash or near-cash holdings. He says many fund managers would never be prepared to take such a high cash position because if they get it wrong, there is a risk of massively underperforming the benchmark.
Chelsea Financial Services managing director Darius McDermott says there are two major players in the sector.
The second big player, the Henderson New Star financial opportunities fund, is much more invested and the fund tends to outperform in rising markets.
Killik head of research Mick Gilligan says that the investments in financial funds that he has made were mainly a call on Gibbs as a manager. He says the only reason for investing in other funds within this specialist sector would be if an investor’s opinion would dramatically differ from that of Gibbs.
Coghill has used both funds. She used the Jupiter fund because of Gibbs’ long and outstanding track record.
In the past, Coghill also used the Henderson New Star financial opportunities fund, which has build a good track record this year. Yet last year, she says, the fund was too overweight in insurance and Guy de Blonay, the manager, did not identify the problems fast enough.