S&P downgrades UK Opps as figures fall

It says the loss of manager Michael Rimmer, who along with four others left the group in July following a pay dispute, has exacerbated the performance problem.

Indeed, despite having the highest-alpha mandate at Investec, the fund has underperformed the more mainstream UK Blue Chip fund in recent years. The fund is now managed by Daniel Hanbury, who, says S&P, lacks experience in large-cap mandates.

Other funds that saw ratings downgraded to not-rated in S&P’s latest review of the UK Growth sector were the Jupiter Growth & Income fund, managed by Paul Sheehan, and the Scottish Widows UK Select Growth, run by David Urch.

According to S&P, the fund run by Sheehan (pictured), which was A-rated, has had a bad 12 months’ performance, caused by “a wrong strategic move in early 2004”. As a result, its relative performance record has slipped to below that usually expected of a rated S&P fund. Over 12 months to October 11, 2004, the fund is ranked 290th out of 295 funds in the IMA UK All Companies sector. This follows a return of 4.60% compared with the sector average of 11.50%.

The only other funds that saw falls in their ratings were the Threadneedle UK Mid 250 and UK Smaller Companies funds, which each saw their AA ratings fall to single A. Both are managed by Paul Cramp.

Conversely, funds seeing upgrades in their earnings included the Schroder UK Enterprise fund, managed by Tom Carroll, Invesco
Perpetual UK Aggressive and Standard Life Investments UK Equity Growth.

In S&P’s report on the sector, director of fund research James Tew notes a general move towards the top end of the mid-cap range and to small large-caps. Tew says: “It is a testament to active portfolio management that UK equity funds enjoyed a remarkably buoyant first half in what was a difficult year. Fund managers certainly had to work hard on their stock selection and sell disciplines.”