Fundmanager: Why fund managers are celebrities, too

Follow your manager as well as your fund
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The Independent Online
We all feel under pressure to buy an Isa by 5 April, assuming we have a few thousand to spare in the first place.

We all feel under pressure to buy an Isa by 5 April, assuming we have a few thousand to spare in the first place. We listen anxiously to the advice of our friends and even independent financial advisers (IFAs) about which unit or investment trust we should put our money in.

We are told to be influenced by what a unit trust provider charges, we have to check the past performance of a fund, we are meant to be aware of income or growth or both, and we must look at sectors and geography.

Do we have to pay attention to the worth of the particular fund manager/s buying and selling the stocks? Until about 10 years ago the cult of the fund manager didn't exist. Fund managers were unknown men (virtually no women among them) in blue suits.

But given greater media coverage andcopious fund promotion, fund and fund manager promotion generally took off in the l990s, spurred on by the adulation of US fund managers such as Peter Lynch.

This is not to suggest that making fund managers high profile can be all hype. They become well-known in the City because unit trust watchers link a fund's performance with its manager and they follow, and appreciate, management from early on.

Jason Hollands of discount broker Bestinvest (tel: 020-7321 0100) says: "In some stables you just can't identify who is making decisions because it is collective: Britannic is a good example. At the other extreme, there are well-established fund managers, say with Jupiter or ABN Amro, where what the lead manager says, goes. There are funds, like Société Générale, with strict rules ­ such as to what extent you can be overweight or underweight in certain sectors or shares ­ restricting managers.

"It's important to understand that watching what fund managers are doing is only part of the bigger assessment picture. But it is certainly highly significant. Investors should monitor a fund for a year or so if there has been a significant change in personnel."

Alan Emery, director of Berry Birch & Noble (020-8777 7778), says the company follows Standard & Poor's or Micropal's points-awarding fund-assessment tables.

These can be found in Money Management magazine and funds are rated on a number of factors (fund managers are one of them) and you can follow how they go up and down over three, five or 10 years. Mr Emery says: "When a manager leaves a stable and performance may be affected, we leave Micropal to monitor that for us."

Some fund-watchers say that, as a guide, this is not rapid enough. However, most IFAs are content to follow the traditional path, using Micropal to monitor their clients' Isas and unit trusts for a fee of 0.5 per cent a year.

Justin Modray of discount brokerage Fundsdirect.co.uk (08700 738393) says: "Look to see what funds are doing in the same sector. Also the fund manager is a bit like a football manager, it is important when he arrives or leaves: his movements have to be monitored."

Given the number of unit trusts failing to beat the various indices, the message is: "When in doubt, bail out". You owe it to yourself to be aware of your Isa or unit trust performance.

Not doing so could lose you a lot of money. A good example is Scottish Widows' European Fund. Fund manager Alan Morrillo and others left in December 1999 and the trust hasn't done well since.

Anthony Bolton is one of several fund managers at Fidelity. He has been there more than 20 years, is hands-on, a stock-picker and most of his funds do well most of the time. Bolton specialities include: Special Situations UK and the new Special Values.

Nick Train was well known for his GT Income fund. When GT was taken over by Invesco, he went to M&G, and is now with Linsell.

Nigel Thomas has a long, 20-year plus track record as head of ABN Amro's funds. Until recently, he successfully managed Solus Special Situations, and is described as a "long-distance success story with a free hand".

Bill Mott of Credit Suisse is highly rated and manages the CS Income fund, while Katherine Garratt-Cox has just taken over as head of Aberdeen fund managers, having made a name for herself at Hill Samuel.

Roger Guy is another high-flyer at Gartmore. He takes big positions and is known for his European Selected Opportunities Fund which has beaten the index five years running.

Edward Bonham-Carter is the head man at Jupiter, after star fund man William Littlewood and founder John Duffield left last year. Jupiter also has the highly respected manager Anthony Nutt

Artemis' Mark Tindall, John Dodd and Lindsay Whitelaw have brought their reputations to this stable which they recently set up. It has a home for higher-risk investments, known as its UK Smaller Companies Growth fund.

Other rated fund managers include Adrian Farthing of Old Mutual, Peter Davies of Mercury Asset Management, who was replaced by Steve Thompson when Mercury was bought by Merrill Lynch. There is also Ann Hall and Heather Manners of Henderson, Helena Morrissey at Newton, and Claire Griffiths and Rory Powe of Invesco.

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