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Blockbuster review: the ten biggest funds of 2012

Citywire Global analyses the largest funds in our database and finds it’s been tough going for many of the big players over the past 12 months.

Blockbusters funds

Citywire Global defines ‘blockbuster’ funds as those operating with the largest AuM. As the list from the end of 2011 shows, this is not confined to one approach or asset class and takes in global equities, corporate bond funds and even specialist equities.

Over the past twelve months, some funds have seen inflows while others have seen investors take money out. The following gallery reveals the latest ranking according to AuM for these blockbuster funds as of the end of 2012.

But does size really count when it comes to outperformance? Here we take a closer look at how these 10 funds have fared over the 12 month period from the end of December 2011 to December 31 2012.

*All returns calculated in euros.

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10. M&G Global Basics

Current AuM: $7.8 billion

Estimated AuM at start of 2012: $9.6 billion

Sector: Equity Global

One year total return: 4.01%

One of four M&G funds in this analysis sees Graham French’s basic industries-focused fund follows the same vain as a number of his peers in terms of performance.

The fund ended 2012 nearly 11 percentage points off its Citywire benchmark, while also being eight percentage points behind the average manager in the global equities sector.

Over the course of the year, French stood fast on holdings in much-maligned security company G4S, which received severe criticism for its attempts to cover the security detail for the 2012 Olympics in London.

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9. Carmignac Investissement

Current AuM: $9.6 billion

Estimated AuM at start of 2012: $10.28 billion

Sector: Equity Global

One year total return: 8.9%

Edouard Carmignac’s first entry into this analysis is not a happy one. The global equity Carmignac Investissement fund has returned 5.4% at a time when his benchmark and the average global equity manager both surpassed 6%.

The longer term performance of the fund is stronger and, more recently, Carmignac said tactical allocations to the euro and increased exposure to Japanese stocks had served as a positive contributor to performance in December 2012.

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8. M&G Corporate Bond Fund

Current AuM: $10.1 billion

Estimated AuM at start of 2012: $ 9.3 billion

Sector: Bonds GBP Corporates

One year total return: 14.65%

This is one of two funds included in our analysis for M&G fixed income specialist Richard Woolnough. He took over the fund from Jim Leaviss and has run the UK-domiciled fund since March 2004.

In terms of performance, he has lagged both the index and the average manager in the UK corporate bond sector over the past 12 months. This is despite a brief period in July where he posted a marginally stronger performance than his peers.

The fund is mainly centred on investment grade bonds (88%), while the top 10 holdings show a diverse array of businesses from supermarket chain Tesco to Imperial Tobacco and Lloyds Banking.

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7. BGF World Mining

Current AuM: $11.3 billion

Estimated AuM at start of 2012: $12.3 billion

Sector: Equity Natural Resources

One year total return: -4.58%

The only specialist equity fund on this list is the BGF World Mining Fund, which according to the most recent available data, has seen a slight slump in AuM compared to this time last year.

In addition, the fund is also the only one of the 10 largest in our database to end the 12 month analysis period in negative territory. This is seen in a 4.5% loss in euro terms at a time when its index fell 1.17% and the average manager lost 3.21%.

Evy Hambro – who co-runs the fund with former subject of The Watch List co-manager Catherine Raw – previously said he believed the mining industry was being hurt by a disconnect between supply and demand expectations.

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6. M&G Recovery

Current AuM: $11.6 billion

Estimated AuM at start of 2012: $12.9 billion

Sector: Equity UK

One year total return: 11.95%

The third different fund manager from M&G is Tom Dobell, who is the lead manager on the M&G Recovery fund. The strategy focuses on out-of-favour stocks deemed to be on the verge of recovery.

Dobell kept pace with the index and the average manager over the course of the year and began 2012 with a strong showing. However, his fortunes changed over the course of June and Dobell ended the year four percentage points off his benchmark and exactly six points behind the average manager.

In September, Dobell revealed his picks in natural resources had been a drag on performance after many of his oil and gas stocks had suffered off the back of global growth fears. At present, he has 21% of the fund allocated to oil and gas names.

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5. BlueBay Investment Grade Bond

Current AuM: $11.8 billion

Estimated AuM at start of 2012: $10.27 billion

Sector: Bond Global Corporates

One year total return: 15.22%

One of only two funds in this analysis to better both the average manager and its Citywire-assigned index is the BlueBay Investment Grade Bond fund. This is run by the Citywire A-rated trio of Andrzej Skiba, Geraud Charpin and Raphael Robelin.

According to the most recent available factsheet, the trio has run overweights in healthcare and industrials, while underweighting banks and utilities. Recent performance is said to have been aided by an overweight to BBB-rated bonds.

Looking ahead, the managers are concerned about the low level of absolute yields in the market and have therefore adopted an underweight position in interest rate duration to protect against interest rate hikes.

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4. M&G Optimal Income

Current AuM: $11.9 billion

Estimated AuM at start of 2012: $10.9 billion

Sector: Global bonds

One year total return: 16.26%

The only other fund to better both its benchmark and its sector average is the M&G Optimal Income fund. This is the second fund in this analysis under the stewardship of Richard Woolnough.

Woolnough announced in April he had boosted his exposure to financials after halving his bets in government bonds. This selective move into the financials sector was seen to reverse Woolnough’s long-held aversion to banking names.

The fund is currently positioned with a strong emphasis on BBB-rated bonds, which make up 27% of the fund’s credit exposure. This compares to a 22% exposure to AAA-rated bonds and 13% in A-rated securities.

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3. DWS Top Dividende

Current AuM: $12.1 billion

Estimated AuM at start of 2012: $9.4 billion

Sector: Equity Global Income

One year total return: 7.47%

Following a large-cap, value-driven approach, fund manager Thomas Schüssler is nearing eight years as lead manager on the DWS Top Dividende strategy. He took over from Sonja Laud at the end of 2005.

Schüssler is another to have struggled to keep pace with either the index or the average manager in his sector over the course of 2012. This comes after Schüssler championed strong dividend generating opportunities both in cyclicals and the emerging markets.

Speaking to Citywire Global over the summer, Schüssler said he was holding 9% cash but this has since fallen to 6.7%. His largest allocation by region is to the United States (35%).

2. AllianceBernstein-Global High Yield

Current AuM: $25.1 billion

Estimated AuM at start of 2012: $18.4 billion

Sector: Bonds Global High Yield

One year total return: 14.48%

Headed up by Euro Stars A-rated manager Douglas Peebles, alongside Paul DeNoon and Gershon Distenfeld, the AllianceBernstein Global High Yield fund is the second largest fund available in our database and also the recipient of the largest amount of inflows in 2012.

The fund narrowly underperformed the average manager in 2012 and was also three percentage points below its Citywire benchmark, the BofA Merrill Lynch Global High Yield. It did, however, stay largely consistent in its upwards growth in line with the two indices.

The underperformance experienced in 2012 follows on from a tough period over the past three years for the fund, which was subject of the Citywire Global Performance Clinic treatment in November 2011.

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1. Carmignac Patrimoine

Current AuM: $32 billion

Estimated AuM at start of 2012: $29 billionSector: Mixed Asset EUR Flex – Global

One year total return: 5.42%

Finally on our list is the largest fund in the Citywire database, the Carmignac Patrimoine fund. This mixed asset strategy weighs in at around $30 billion and is run jointly by Edouard Carmignac alongside Rose Ouahba and Frédéric Leroux.

Despite the impressive size of the fund, its performance was below that of its Citywire benchmark and the average manager over the 12 month analysis period. It was narrowly behind its peers in mixed assets by less than one percentage point.

Recently the trio of managers have focused attentions on peripheral European debt, while, on the equities side, the fund managers are keeping a close eye on developments in the UK and Japan.

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Related Fund Managers

Raphael Robelin
Raphael Robelin
16/33 in Bonds - Absolute Return EUR (Performance over 3 years) Average Total Return: 9.25%
Edouard Carmignac
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363/554 in Mixed Assets - Flexible EUR (Performance over 3 years) Average Total Return: 22.68%
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363/554 in Mixed Assets - Flexible EUR (Performance over 3 years) Average Total Return: 22.68%
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150/151 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 22.03%
Evy Hambro
Evy Hambro
7/61 in Equity - Gold & Precious Metals (Performance over 3 years) Average Total Return: -44.20%
Paul DeNoon
Paul DeNoon
68/239 in Bonds - US Dollar (Performance over 3 years) Average Total Return: 13.33%
Gershon Distenfeld
Gershon Distenfeld
58/119 in Bonds - Global High Yield (Performance over 3 years) Average Total Return: 18.53%
Richard Woolnough
Richard Woolnough
49/61 in Bonds - Sterling Corporate Bond (Performance over 3 years) Average Total Return: 21.78%
Douglas Peebles
Douglas Peebles
11/75 in Bonds - Europe (Performance over 3 years) Average Total Return: 27.24%
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Thomas Schüssler
60/86 in Equity - Global Equity Income (Performance over 3 years) Average Total Return: 39.88%
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