Patel says there are an “array of outstanding managers in the IMA UK All Companies sector to choose from”.
Senior analyst Patel says the £49.4m fund had come under scrutiny “for its consistently poor performance” following a recent review of the sector.
She says: “Our analysis suggests the fund’s sector allocation decisions, as well as stock selection, have been the main drivers of poor performance.
“The large exposure to the financial sector (currently 22.5%) in particular has not been helpful.
“Exposure to the consumer goods sector has also been negative for returns as a slowing UK economy and higher unemployment have put a brake on consumer spending, and this has weighed heavily.”
She adds: “In terms of stock selection, holding banks such as Barclays within the financial sector has not been a shrewd move, as these have struggled owing to escalating concerns over the euro zone crisis.
“Meanwhile, holdings in Hays, the recruitment firm, and Keller Group, the engineering specialist have suffered as the earnings outlook for both companies has dteriorated this year.”
Patel says the AXA Framlington UK Select Opportunities fund was a “superior alternative” and lauded manager Nigel Thomas’s experience and stock picking ability.
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