Gary Potter and Robert Burdett, co-managers of the Thames River Cautious Managed Fund, are understandably wary about the underlying factors driving the current rally. While they have positioned the fund's portfolio to participate in market beta, their overall stance is that once treasury receipts start drying up there will be insufficient momentum in the global economy to sustain the current rate of recovery.
The fund commenced operations in October 2007 as one of five multi-manager funds developed at Thames River under the auspices of Mr Potter and Mr Burdett, who had previously managed a stable of thematically similar vehicles at Credit Suisse.
The Cautious Managed Fund has already attracted around £80m from investors, perhaps reflecting a swing towards defensive mandates with an emphasis not only on generating returns, but also on preserving capital.
The fund's net asset value (NAV) has grown by 18.5 per cent over the past year, placing it mid-table within the Investment Management Association's (IMA) Cautious Managed sector, although it has outstripped the sector average over the past quarter, and has delivered second-quartile performance since launch.
The managers cite the Nevsky Emerging Asia and Odey European Funds as their best-performing recent investments. Outside of fixed-interest securities, the UK accounts for around 40 per cent of investments. However, given that the domestic economy looks particularly vulnerable, it will be instructive to see what happens to the level of UK exposure if and when markets begin to contract.
| PRICE: | 100.3p (bid) | SHARPE RATIO: | na |
| SIZE OF FUND: | £80m* | 3-MONTH PERFORMANCE: | 5.47%* |
| NO. OF HOLDINGS: | 31 | 6-MONTH PERFORMANCE: | 10.47%* |
| SET-UP DATE: | 1 October 2007 | 1-YEAR PERFORMANCE: | 16.75%* |
| MANAGER START DATE: | 1 October 2007 | TOTAL EXPENSE RATIO: | 2.39%* |
| INITIAL CHARGE: | 5% | YIELD: | 2.55%* |
| MANAGEMENT FEE: | 1.5% | MINIMUM INVESTMENT: | £1,000 initial, £100 savings |
| TRACKING ERROR: | na | MORE DETAILS: | thamesriver.co.uk |
Source: Thames River & *Morningstar as at 11.11.09
Top ten holdings (as at 30/10/09)
| Holding | Percentage |
|---|---|
| Legal & General Dynamic Bond Trust | 6.81 |
| Henderson Strategic Bond | 6.34 |
| JPM Highbridge Income Opportunities | 5.84 |
| Artemis UK Special Situations | 4.91 |
| Cazenove Strategic Income | 4.90 |
| M&G Global Macro Bond | 4.83 |
| JO Hambro Capital Management UK Growth | 4.00 |
| Threadneedle Absolute Return Bond | 3.93 |
| River & Mercantile UK Equity Income | 3.90 |
| Neptune European Opportunities | 3.75 |
Sector breakdown
| Asset Allocation | Percentage |
|---|---|
| Fixed interest | 35.81 |
| UK | 26.19 |
| Specialist | 16.43 |
| Europe | 6.00 |
| Asia | 4.64 |
| North America | 4.23 |
| Japan | 3.43 |
| Cash | 3.27 |
