HEAD-TO-HEAD: Blackrock versus Church House

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Source: FE Fundinfo. Three-year cumulative returns in US dollars. 

Performance

Run by one of the largest and most experienced UK equity teams, the Blackrock UK Absolute Alpha fund is a “very useful portfolio diversifier”, according to McDermott.

It has comfortably beaten the Investment Association Target Absolute Return sector average over three years (7.33% versus 4.49%), as well as its 3-months sterling Libor benchmark cumulative return of the period of 5.35%.

“Looking at the discrete annual performance data from FE Fundinfo, we can see 2015 (8.61%) and 2019 so far (8.21%) have produced the strongest annual returns, with 2018 the only year the fund incurred losses (6.02% versus 2.81% for the sector),” said McDermott.

Turning to the Church House Tenax Absolute Return Strategies Fund, its goal is to maintain a diversified portfolio, principally in direct investments, seeking low correlations with equity markets and preserving capital, according to McDermott.

“It targets positive returns over rolling 12-month periods and Libor + 4% over rolling three-year periods,” he explained.

During the past three years the fund has returned 8.01% with 2016 the strongest year of discrete performance (7.57%) – while 2018 was also the only year this fund saw its assets fall (-1.75%), he noted.

The three-year annualised volatility of the Blackrock fund (8.85%) is slightly higher than that of the Church House fund (8.07%), which is perhaps to be expected because of the consistently larger allocation to equity markets made by the Blackrock manager.

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