Skandia Investment Management chief investment officer James Milliard believes that following its 2006 launch, the company’s global best ideas fund has successfully met all its doubters’ challenges.
The fund has been consistently top quartile since its launch, growing to £392m in size and delivering investment returns of 30 per cent.
It operates on a simple format, with SIML giving mandates to what they see as 10 of the best managers in the market and making use of their intellect.
Milliard says: “It is simple, yet innovative, something that the market has been craving for. The idea being that we take the 10 best ideas from 10 managers and build it into a portfolio of stocks that is unconstrained with the manager staying true to their strengths over the long-term.”
The fund prides itself on its diversity, split not only on a geographical basis but also with a management style that ensures all market styles are in favour at some point in time.
The UK portion comprises 50 per cent of the fund. Milliard says this is because investors always have a bias to what they are close too. The short list includes some of the biggest names in the industry, with Richard Plackett, Mark Tyndall, Roger Whiteoak,Stephen Whittaker and Ashley Willing all on the UK mandate.
The other half of the fund is comprised US, 17 per cent, Europe ex UK, 14 per cent, emerging markets 8 per cent and Japan, 5 per cent, with Tom Walker, Crispin Odey, Angus Tulloch, Nathan Gibbs and Hugh Young completing the list.
Milliard says SIML wants the managers to stick to their strengths as the difference in styles means there will always be some who will outperform. The proof of this is in the fact there is little or no stock-replication, with Xstrata the top holding with 2.38 per cent of the fund.
Milliard says: “I think the biggest stock holding we have ever had is about 4 per cent, indicating just how different some of the managers views are. Even the cap sizes change quite freely, with large caps the dominant holding at present with some 69.7 per cent of the fund.
“We believe this fund has the scope to build some serious capacity off the back of some top-class managers and an excellent process. We have followed this up with the launch of the UK best ideas fund which has already grown to £248m. There are always going to be good ideas out there and we feel we have the right managers to succeed.”
What brokers think of the fund
Hargreaves Lansdown head of research Mark Dampier says:
“It has been a great performer in the past 12 months and has made a lot of many for anyone involved. My only surprise is those advisers who have been sceptical to the notion.”
Chelsea Financial Services managing director Darius McDermott says:
“Although it has not got a long-track record, because of the underlying manager it invests in, then in a strange way it actually does. But it has been an innovative fund that has been one of the best in the sector so far.”