Anita Dalton does not pay much attention to financial advisers. “I’ve found they can be very risk adverse and, given my age, always say I should be taking less risk with my money,” she said. But Dalton has no intention of following this advice at present.
“I might be in my late 60s, but if I don’t take risks with our money now we won’t be able to afford to retire.”
Anita started to manage her husband’s SIPP, the couple’s main investment portfolio, in 2009 after they became fed up with its lacklustre performance.
She says: “At this point the entire portfolio was in a couple of commercial property funds. I couldn’t see the point of having all our money in a single asset, so decided I could do a better job myself.”
The money that was in these property funds took a hit when the market fell following the financial crisis. Since then Dalton has diversified their holdings, and now invests in around a dozen funds.
DIY Diversification for Financial Success
Dalton says she is well suited to managing the couple’s finances. She still works as a forensic accountant, and says she likes dealing with figures.
“I have a spreadsheet showing exactly where our money is invested, and I update this weekly, usually on a Friday morning,” she says. “I do my research carefully. I look at a fund’s previous performance and what its top holdings are. There is a lot of information now available online and in specialist publications and newspapers, so it’s far easier to run your own investments. I don’t think I could have done this so successfully 20 years ago.”
Targeting a High Return Over the Medium Term
Dalton says she’s targeting returns of around 45% over a three year period, which to date she has achieved.
“This year our SIPP was up by almost 10%, not quite as much as I was hoping for, but I was pleased with this return nonetheless, given the state of the market,” she said.
In recent years, one successful holding has been Matterley Undervalued Assets, now part of Miton Undervalued Assets. Since investing in this fund, which predominantly invest in out-of-favour UK companies, Dalton says she has seen a 52% return on her money. The fund is now managed by George Godber and Georgina Hamilton.
Performance has been good; the fund has a five-star rating.
Biotech Funds Boost Portfolio Performance
Dalton is also a fan of biotech, and has money in both AXA Framlington Biotech and Pictet-Biotech funds. She has seen a return of more than 60% on the AXA fund.
The £744 million AXA Framlington fund has been a popular choice for investors in recent years, with strong gains over 2013 and 2014, although the last 12 months have proved more challenging for the biotech sector. The fund has a four-star rating from Morningstar analysts.
The Pictet-Biotech fund has a two-star rating, and has not made as strong gains as the AXA fund in recent years. The Pictet fund has been managed by Michael Sjöström since it launched in 1995, and he has a Neutral Rating from Morningstar fund analysts.
Morningstar analyst Barbara Claud said: “Sjöström works with an investment team made up of three analysts with medical expertise. The team has lost several members in recent years who have not all been properly replaced. More stability would be desirable.”
Dalton says she remains optimistic about the outlook for the biotech sector. “Medical technology seems to be advancing at such a pace, and I think this will continue. There’s also likely to be further takeovers and mergers in this sector which should be good news for shareholders.”
Getting the Grandchildren into the Stock Market
As well as managing her husband’s SIPP, Dalton has recently opened investment accounts for her two grandsons, who are aged two and 15 months.
She explains: “At Christmas and birthdays we want to top these up so we can help build a nest egg for their future.”
At the moment both of these funds are invested in Neil Woodford’s Equity Income fund and AXA Framlington Biotech.
She described these choices as “one slow-growing, safe pair of hands, the other is a bit more wild”.
She explains: “I’ve had money with Neil Woodford for a number of years and I think he is a good fund manager. This will hopefully balance the higher risk biotech fund.”
Morningstar analysts agree that Woodford has an outstanding track record when it comes to managing investors’ money, which has earned him a Bronze Rating. This reflects their continued confidence in his ability to outperform.
Analysts Danial Vaughan says: “The strategy of this fund is clear.. generating a positive capital return over the long term, and growing the income whilst offering capital preservation.” He manages money with “high conviction, patience and passion”.
Dalton says she may add other funds to these investments. “I’m considering popping a bit of Japan in there - but am just keeping an eye on the market at present.”
As well as looking at information online she’s also an avid reader of the financial press.
“I don’t always agree with everything in them, but it helps to keep me informed. I try to invest ahead of any ‘chatter’ about sectors or companies. I got into biotech before there was a huge stampede into this market, so benefited from that,” she said.
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