Marlborough brings failing growth fund in-house

Marlborough Fund Managers has taken its UK Equity Growth fund in-house after terminating the contract of MD Barnard. As Fund Strategy reported on November 13, 2006, the fund has suffered an extended run of underperformance.

Keith Ounsworth, Marlborough’s sales and marketing director, says Barnard’s continued focus on alternative investment market stocks meant the fund was “close to bottom at all times” in recent years. As a result, outflows have reduced the fund’s assets to just £10m, from a high of about £60m.

According to data from Morningstar, Barnard’s long-term record remains impressive. Since taking over the fund in April 1995, the portfolio has made a return of over 400%, almost double that of the UK All Companies sector. But the fund’s more recent problems are clear to see. When measured over the five years ending January 7, the fund is ranked 226 out of 230 portfolios in the sector. Its three-year figures see it fall to 258 out of 259 funds.

Nicholas Cooling, Marlborough’s deputy chairman, has taken over the running of the fund for the time being. Ounsworth says Marlborough is conducting a review on the future of the fund but declines to speculate on its outcome. Possibilities may include a merger with another Marlborough fund or even liquidation.

However, the firm may also consider handing the portfolio to Greg Bennett, who joined Marlborough from Neptune in 2006.

Bennett’s UK Large Cap Growth fund is ranked first out of 287 UK All Companies funds since its launch, in March 2006.