Conclusion
Overall, the ability and skill of a fund manager is of course of great importance, but advisers need to keep an objective view on things when changes in personnel take place. It is far too easy to follow a fund manager because he has always out-performed his rivals, but the decision to move client portfolios away to pastures new in pursuit of a star manager may not necessarily be the right one for business, and should be approached with one’s business head on, and access to the findings of top-quality research.
Nick McBreen is IFA at Worldwide Financial Planning
It is worth looking at some recent examples of fund management changes and the resulting changes on fund performances:
Neil Woodford > Mark Barnett, Invesco
A good example is the Invesco Perpetual Income fund, in which, prior to his much-heralded departure, Neil Woodford had set the bar very high in performance and returns for the fund, and displayed a remarkable skill in reading the market and taking smart positions. Since March 2014, when Mark Barnett took over the reins of managing the fund, some good progress has been achieved in relation to the UK All Companies sector and competitor funds. The mandate of generating a sustainable and reliable income stream from any fund is no simple job, but it would appear that the decision to stick with Mark Barnett rather than following Neil Woodford is starting to look a wise one.
Graham French > Randeep Somel, M&G
Graham French was indeed a star turn at M&G managed growth. Anyone trying to fill his shoes needed to be an extraordinary manager. Of course, the ability of anybody to deliver returns in the flexible sector needs to be of the top order, and Somel has a hard act to follow. Randeep Somel has been given the mantle, and with only a year in charge of this mainstream flagship fund, in the short term he may still be firing at less than full potential. He does however have an in-depth and very sound background as an analyst, and should be given the benefit of the doubt.
Philip Gibbs > James Clunie, Jupiter
The Absolute Return sector has very slowly made some upside over the past five years but the Jupiter Absolute Return fund has been lacklustre to say the least. This may well be put down to the gradual winding down of star manager Philip Gibbs, leading up to his ‘retirement’. The new incumbent James Clunie can only go one way with this fund and that has to be upward. Compared with others in the sector, Mr Clunie has a mammoth task to make up the slack in performance, and the early indicators are that little progress is being made.
