Newton Income fund dropped from Wealth 150

Richard Wilmot’s Newton Income fund has been removed from Hargreaves Lansdown’s Wealth 150 list of favourite funds.

Richard Wilmot
Richard Wilmot

The broker says the decision to take the £1.2 billion fund off the list is based on the performance of Wilmot since he took over the portfolio in March 2011.

Meera Patel, senior analyst at Hargreaves Lansdown, says: “While we initially had high hopes that he could deliver strong returns, performance has disappointed.

“Our analysis suggests that his stock selection has generally deteriorated and we no longer hold high conviction in the fund.”

Patel also claims the fund’s ability to invest up to 20% of the portfolio in overseas companies is not being used to its full potential, reducing its competitive edge over its peers.

“We feel this additional change to the fund’s approach, combined with poor stock selection, are the reasons for the fund’s disappointing performance,” she says.

The fund has lost 13.75% over the last six months, compared with the loss of 11.30% in the IMA UK All Companies sector.

Hargreaves Lansdown says the removal of the fund from the Wealth 150 list should not be taken as a recommendation to sell, if it continues to meet investors’ objectives.

Patel adds that the fund is expected to merge with the Newton Growth fund in 2012 – a move which she claims “makes sense” given their similar management and that she hopes will result in improved performance.

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