Bestinvest downgrades Nickol’s £500m Old Mutual UK small-cap fund

Dan Nickols 450

Bestinvest has downgraded the £492m Old Mutual UK select smaller companies fund, claiming manager Dan Nickols has “struggled somewhat to navigate difficult markets since 2009.”

The fund has been downgraded from the top five-star rating to four stars, with Bestinvest claiming the fund struggled to produce the level of outperformance it has in the past.

Bestinvest senior analyst Rob Harley says: “Whilst the Old Mutual UK Smaller Companies fund has continued to grind out relative outperformance against its peer group, this has been at a more reduced rate than we have come to expect in the past. Although performance has picked up more recently, the manager has struggled somewhat to navigate the difficult markets since 2009.

“Assets under management across all of Old Mutual’s dedicated small and mid cap mandates are now just shy of £2 billion which presents a headwind.”

The fund is currently second quartile in the Investment Management Association UK smaller companies sector over three years to November 12, having returned 27 per cent compared to a sector average of 15.5 per cent.