Edward Bonham Carter was among the high-profile casualties of last week’s Standard & Poor’s (S&P) annual UK growth sector review. S&P downgraded Jupiter’s £200m Undervalued Assets unit trust from AAA to AA on concerns that Bonham Carter has less time to focus on day-to-day fund management.
In a statement last week, Bonham Carter (pictured), who took over the fund in 2001, said his record should be judged over the long term. “In the weeks and months to come I expect a combination of sharp interest rate reductions and more stable markets to lead to a return to improved sentiment towards equities. Over the long term, the potential for strong returns from the fund’s holdings remains good,” he said.
Others hit by downgrades included New Star’s Stephen Whittaker and Alastair Mundy at Investec. Whittaker’s £340m UK Growth fund fell from AAA to AA because of increased volatility, while Mundy’s £130m UK Special Situations portfolio dropped from AA to A.
S&P also downgraded Baillie Gifford British Smaller Companies, GAM Star UK Dynamic Equity, Goldman Sachs UK Core Equity Portfolio, Invesco Perpetual UK Aggressive, JPM Premier Equity Growth, M&G Select and SG UK Special Opportunities. The downgrading of the Invesco portfolio follows a manager change.
There was better news for Karen Robertson at Standard Life Investments. S&P upgraded Robertson’s UK Equity Growth portfolio to AAA because of consistent outperformance and strong stockpicking.
Three Newton portfolios – Growth, Income and UK Opportunities – were given AA ratings to reflect the funds’ “solid medium-term track record”. JPM UK Dynamic was also upgraded to AA.
The review covered 77 funds, of which 15 were British smaller companies portfolios. According to S&P, one of the main influences on fund performance for the 12 months ending June 2008 was exposure to domestic cyclicals. Outperformance over the period was confined to six subsectors: oil equipment services, oil and gas, mining, industrial metals, electricity and chemicals.
According to S&P, the average mainstream growth fund has fallen by 11% this year. Smaller companies portfolios have declined by an average of almost 9%.