The fund, run by Richard Plackett, is now three stars.
Tilney Bestinvest senior research analyst Tom White says the fund has underperformed owing to its overweight to mid-caps, which have been ravaged this year, as well as quality.
The FTSE 250 had fallen more than 15 per cent from the start of the year to mid-October; it has since recovered slightly to be down 10 per cent for the year to 17 December.
“The fund has suffered this year, underperforming the FTSE All-Share benchmark by 9 per cent in the 11 months to end of November, placing it towards the bottom of the UK All Companies sector rankings,” White says.
The fund’s style has a value bias, a sector that has underperformed cyclical names as the UK recovery has picked up pace in the past few years.
And like many active managers, the fund has been bitten by the unexpected outperformance of large cap over mid and small-cap companies as the UK’s strong growth rolled into high gear this year.
“However, we believe the problems go back further – given the overweight to the FTSE 250, the fund should have performed better prior to this year when the mid-cap index was roaring ahead,” White says.
Stockpicking has been a detriment in places, he adds, with the fund holding Deepwater Horizon-dogged BP, regulator-hounded Barclays and miner Rio Tinto which is suffering from crashing commodity prices.
“We continue to like manager Richard Plackett, and believe the recent reduction in his responsibilities – he is no longer team head – should enable him to give the fund a renewed focus.
“In addition we believe the stylistic headwinds that have hit the fund in recent years could easily prove beneficial going forward. However, we believe the reduced rating is appropriate given recent performance.”
FE Analytics gives the fund just one star for its five star rating system.