Our sister title FT Adviser recently published interesting data from Defaqto on the best-performing Growth model portfolio on the market for the three years to the end of April 2024.
The folks at Fundhouse came out on top of that particular chart so we thought it prudent to catch up with Rory Maguire, the chief investment officer and co-founder of that firm, which the latest Wealthnet data indicates has grown its assets to over £1bn in recent months.
The growth portfolio it runs returned 23.8 per cent during that time period, fully 80 basis points ahead of the next portfolio, which is run by AJ Bell.
Maguire told Asset Allocator that his growth strategy involves investing in a combination of active and passives, and based on the principal of making “highs odds or low odds decisions".
He said: "For example, I think a strategy based on getting the macro right and moving portfolios around based on the macro environment, that is an example of a low odds, decision, that is, the chances of being right are small.
"Doing allocation based on top down analysis of regions also doesn’t seem to work."
According to Maguire: "We are contrarian and so tend to own things that have been out of favour. Right now that includes emerging market equities and UK equities.
"But we don’t allocate to funds from those regions, we buy global equity mandates that are overweight those areas. One example of a fund we own in this area is Schroder Global Recovery.”
Other allocations
Asset Allocator's own proprietary database indicates that this fund is only owned by one other of the allocators we monitor, and readers will have noted that Kevin Murphy, long a lynchpin of the Schroders Value team, has departed to join former Jupiter fund manager Ben Whitmore at his new venture.
Maguire says while the departure is certainly relevant to the investment case for the Schroders Global Recovery fund, “there is a big team there, so it is not so much of a concern as to make us divest.”
Turning to his fixed income allocation, Maguire says across his portfolios: “We are the longest duration we have been for years. Bonds are back as both a return generating asset and as a diversifier.
"I think more broadly that the 60/40 portfolio is back. it was written off by many during the period when bonds yielded very little, but now I think it should broadly do the job for clients."
And what does he think of gilts?
Maguire adds: "We didn’t like UK government bonds when they yielded less than 1 per cent, but after the so-called "mini-budget", we bought them.”
