Moneyspider in the News

Boutiques out perform their big name rivals

Investment Adviser

Small boutique firms have been outperforming their big name fund management rivals in the Global Growth sector, according to Moneyspider.com.

Research conducted by the investment data analyst showed that over the last five years, Global Growth funds have been dominated by smaller and less known vehicles such as the £265m Neptune Global Equity fund. A £5,000 investment in the Neptune fund would have made a profit of £8,071 in five years while the same investment into the £100m Invesco Perpetual International Growth fund over the same period would have resulted in a profit of £1,179.

Bill Ross, managing director of Moneyspider.com, said: ''This dramatic imbalance in returns shows the importance of not automatically putting your trust in the big name fund management houses. Small houses such as Rathbone and Neptune can seriously reward investors who are prepared to consider unfamiliar or even unknown names."

The £39m Rathbone Global Opportunities fund has also delivered substantial profits of £6,086 growth of over 120 per cent since 2002.

At the bottom of the list was Scottish Widow's £515m Global Growth fund, which would have produced a profit of just £662, far less than if the money had been held in an ordinary savings account over the same period.

The Global Growth sector is likely to continue to prove popular with investors in 2007. According to research conducted by Mercer Investment Consulting last January, it was the most popular product category for worldwide pension fund manager searches in 2006, and accounted for nearly a third, 31 per cent of the total £46bn total assets held in global stock markets.

Moneyspider pointed out that the case for focussing on top boutique houses further strengthened by Fidelity International's recent announcement that its own multi-manager team does not hold any of its UK funds but instead prefers to back funds from boutiques.

While returns from top funds in the Global Growth sector have been good, the IMA stated in April that barely 7.5 per cent of the total funds held in Isa wrappers are in this key sector.

The most popular IMA sector is UK All Companies, which currently holds the majority share of investors' Isa money, with 31 per cent of all Isa Investors holding £13bn under management in this zone.

Mr Ross said: "Investing money in the right funds within the UK All Companies sector would have generally produced good returns. 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."