Jayesh Manek’s £40m Manek Growth fund has soared to the top of the UK All Companies sector, losing just 2.5% in the last three months of excessive market volatility.
The former pharmacist is also top across all sectors during September with the fund up 7.44%.
Manek has been well ahead of his UK All Companies peers over the summer, with the average fund losing 13.6% since the start of July, according to Morningstar.
The manager said he began revamping his portfolio at the end of last year, adding to defensive sectors such as utilities and pharmaceuticals, as he anticipates growth will remain anaemic for a further eighteen months.
He has also been using index futures during the last three months, hedging up to 100% on the majority of stocks, as he anticipated there would be a market correction in July.
He sold completely out of US stocks at the start of the year, which made up 20% of the fund. He used the proceeds to pump money into the utilities and pharmaceuticals sectors- now 30% of the fund.
"In this environment it is the defensive names which will do well. I have been adding to the likes of GlaxoSmithKline and AstraZeneca," said Manek.
"I sold out of US equities at the start of the year as I believe growth will be sluggish for the next eighteen months and high beta plays will suffer."
He said his biggest holding, 10% in the world's largest video search engine Blinkx, has also played a big part in the fund reaching the top of the sector.
However, Manek added performance would have been even stronger had he not sold out of his 4% stake in Autonomy two days prior to Hewlett-Packard making a bid for the group.
"Over the past seven weeks the stock went from 81p to 150p, as the group reported strong results and also benefitted through Autonomy having a 14% stake in the firm.
"I decided to take profits in Autonomy a little too early and sold out two days before the bid, which was disappointing."
Manek famously launched his fund after winning a fantasy fund manager competition in the mid-1990s.
Assets flew into the vehicle, reaching a peak of £300m in 2000, but investors were left disappointed when performance was badly hit by a large exposure to technology stocks.
Long-term performance has been poor, with the fund bottom of the UK All Companies sector over one year and three years.
According to Morningstar the fund has lost 21.2% over one year, compared to the peer group average fall of 5.3%.
Over three years the fund is down 24.6%, with the sector average fund gaining 19.6%.
Nonsense on stilts - Growth ?
The opening paragraph alone of this article may be, inadvertently, the funniest I have ever seen. I don't want to pile into an ad hominem attack on Mr Manek but according to Bloomberg data, the fund has lost 21% over the last 12 months. I fail to see how this warrants such a vainglorious article. The piece also highlights what is so badly wrong with the fund management sector and associated media (not least its utter relentless focus on equities). Who cares about a three month period of relative outperformance but absolute loss ? For as long as financial media parade real losses like these as some kind of victory and focus on the short term, and obsess about equity markets above everything else, end investors will rightly wonder just what the hell is going on and what they are paying for.
Posted by: Tim Price
13 Oct 2011 | 11:39
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