Eight years strong: How the VT Chelsea Managed funds are delivering on performance, value and peace of mind, June 2025

Launched on 5 June 2017 by Chelsea Financial Services, the four VT Chelsea Managed funds celebrate their eighth anniversary this month.

The quartet of funds were initially launched as a more comprehensive alternative to our Easy ISAs offering, by allowing for automatic adjustments to the underlying investments - something that was not possible with the previous service.

Whilst popular, the Easy ISAs were just a step towards what we felt our clients ultimately needed. Anyone who held an Easy ISA without making changes over a decade was likely to have ended up with a very different portfolio than the one with which they started out. Whilst we could give you the information about the likes of fund manager or performance changes – the onus had to sit with the client to actually make those changes.

Please remember that the value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and the ISA and tax rules can change. Chelsea does not offer advice and so you must manage your ISA yourself.

The VT funds solved this challenge and were launched with the simple aim of helping investors reach their various investment goals via the smoothest journey possible. This is why we look to build a series of diverse portfolios that can perform in any economic environment. The funds aim to offer a complete investment solution and there are four different options, each designed for varying risk profiles and objectives: Aggressive, Balanced, Cautious and Monthly Income.

At launch, our assets stood at just £19m across the four portfolios, seeded from within the business itself as well as family and friends. We are pleased to have grown 10-fold to £200m in the past eight years across a number of challenging and changing markets, including the Covid sell-off, rising inflationary markets and the appointment of Donald Trump on two separate occasions.

Since launch, the funds have all performed well and this consistent performance has been noticed by the industry, with the range winning the ‘Best Mixed Asset Small Fund Family Group Over Three Years’ in the Refinitiv Lipper Fund Awards in 2021 and 2022.

Over the life of the funds, we believe our track record of fund picking has been very good. Our portfolios are fairly concentrated at about 40 holdings, and we are always looking for opportunities. Ultimately, we are paid to make money (something which is not so easy in a space as proliferated as multi-asset). We believe we have done exactly that and remain very confident we can continue to do so.

Here are eight reasons why we believe we will continue to stand out from our peers:

1. Performance

Performance has to be the biggest indicator of the ability to manage money and we are proud to say that all our portfolios are top quartile since launch*. Importantly, this performance has not just come in a growth-led QE era following the Global Financial Crisis, where markets were given every opportunity to rise. We’ve had to manage through a number of sell-offs, changes in investment style and bouts of market volatility.

2. Income: consistency and growth

A lot of our clients target income offerings, so it made sense to offer them a solution. We chose to go down the monthly income route because, although it is more work, it offers investors the ability to use that income on repeatable events (monthly bills etc). We prided ourselves on accessing a diverse number of income streams, ranging from UK equities to specialist offerings in the likes of infrastructure and renewables. This allowed us to continue paying an income during volatile periods like Covid, when many of our peers had to cut or suspend dividend payments. We pay 11 standard monthly income payments and then a final payment at the end of each year, which is typically larger than the rest. The VT Chelsea Managed Monthly Income fund currently yields 5.83%, and we have successfully grown our dividend payments year on year.

3. Access to managers

One of the benefits of having a business with a legacy dating back more than four decades - and with a strong media presence - is that we often get great access to some of the biggest fund managers in the industry when we need them. The team conduct over 250 fund manager meetings a year to understand a fund’s performance attribution, outlook and any potential red flags which may occur. This was particularly useful in volatile periods, like Covid, to help us understand the individual challenges fund managers were facing and what action we should take.

4. Experience of the team

Darius McDermott, Juliet Schooling Latter, James Yardley and Joss Murphy have over 70 years of combined experience in fund research, experiencing a number of bull and bear markets. The team are also not afraid to challenge one another on their views on sectors, funds and themes to make sure the case for including a holding is rock solid.

5. Diversification and access to specialist investments

One of the things we’ve looked to do since the launch of our own fund range is to find new ideas and sources of growth and income returns which have kept us ahead of our peers.

This drive for new sources of return has seen us find numerous opportunities within specialist investment trusts. Crucially, these trusts have allowed us to diversify our portfolios and reduce the risks from the wider global economy. In the days of low interest rates, they also helped deliver reliable yields at a time when investors had been crying out for them.

Areas we’ve looked at include the likes of investment trusts investing in renewable energies, such as wind farms or solar panels, which have been taking advantage of government subsidies and the drive towards a carbon neutral economy. Other themes include healthcare, infrastructure and even song royalties at one point.

6. Peace of mind

As mentioned, these funds were launched in response to growing demand for a more ongoing service, which made changes both proactively and reactively to events. The funds give us the ability to pivot quickly. For example, if we hear a fund manager has left we can be out of their funds in a couple of hours. We can also react quickly to changes in style, sector or geography to ensure investors are not left behind.

7. Price

When we launched in 2017, the funds were offered at an industry low. The current annual management charge of 0.3% (exclusive of ongoing charges – the price we pay for investing in the underlying funds) is markedly cheaper than a number of peers in the multi-asset space.

8. We are aligned with our investors

Finally, all of our fund management team, staff, friends and family invest in the funds, ensuring our interests are fully aligned with our clients’. We’re incredibly proud of how well the funds have performed, and we​ are ​very grateful to our customers for placing their trust in us. ​We are committed to delivering strong results for ​o​ur investors, both now and in the future.

*Source: FE Analytics, 5 June 2017 to 11 June 2025
**Source: FE Analysis, total returns in pounds sterling, 5 June 2017 to 11 June 2025

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views expressed are those of the author and fund managers and do not constitute financial advice.