Hargreaves loses faith in Investec European

Hargreaves Lansdown is advising investors to switch out of the Investec European fund, citing a record of poor performance. Instead, the independent financial services firm suggests investing in Cazenove’s European fund.

The Investec fund underperformed the Investment Management Association (IMA) Europe excluding UK sector over the year to March 5, falling 37.82% compared with a 35.13% average fall, while the Cazenove fund declined by 25.62%.

Over three years, Investec European fell 32.51% against a sector decline of 27.30%, while Cazenove European fell 11.2%, according to Financial Express.

Mark Dampier, the head of research at Hargreaves Lansdown, said in a statement that Investec European showed “flashes of brilliance” under Albert Morillo, who managed the fund until 2007. “However this was not sustained and overall returns were disappointing,” said Dampier.

A manager change to Nigel Hankin, who uses Investec’s 4Factor investment process, in 2007 failed to improve performance. “The 4Factor strategy has been a modest success in other regions, but it has not worked in Europe,” Dampier said, citing unpredictable markets.

Cazenove European, managed by Chris Rice, has benefited from a “defensive approach…well suited to the current turbulent climate,” said Dampier. Rice focuses on large and medium-sized companies and reading the business cycle, he added.

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