New Star’s funds of funds deliver strong outperformance

New Star’s flagship funds of funds continue to enjoy strong outperformance relative to their peer groups, which includes other funds of funds, manager of managers funds and single manager funds.

Flexibility, diversification and global remit at core of outperformance during recent market turbulence

New Star’s Active, Tactical, Balanced and Managed Portfolios are all first quartile in their respective IMA sectors over three months, six months, one year, three years and five years

Investing in funds as opposed to stocks gives funds of funds an additional level of liquidity. The ability of New Star’s funds of funds to move between regions and asset classes more rapidly than single manager and manager of manager products has been pivotal in generating strong outperformance, particularly in recent months. Mark Harris and Craig Heron, co-managers of New Star’s fund of funds range, have used this additional flexibility to avoid regions that have been hindered by recent concerns over the US sub-prime lending market and the broader credit crunch. For example, New Star’s most concentrated fund of funds, the New Star Tactical Portfolio, only had a 3.4% combined weighting in North America and Europe at the end of July 2007. New Star’s funds of funds were repositioned ahead of market corrections in July and benefited from exposure to emerging markets including China, India, Russia, Brazil, the Middle East and Africa. These emerging markets proved relatively resilient to credit concerns.

Other key investments that have benefited New Star’s funds of funds are gold, resources and soft commodity exchange-traded funds. Such investments have contributed to strong performance and have provided essential portfolio diversification.

Rob Page, marketing director, New Star Investment Funds, says: “The flexibility of funds of funds and the exceptional management ability of Mark Harris and Craig Heron have resulted in an outstanding level of consistency across all meaningful periods.

“Strong short-term returns are a continuation of Mark and Craig’s exceptional long-term performance track record, which has established them as one of the longest serving and best performing multi-manager teams in the UK.”