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‘130/30 On wrong tracks’

New Star managing director retail business development Stewart Cazier says 130/30 funds are an “evolutionary cul-de-sac”.

He believes that funds restricted to a 130/30 mandate are overly constrained. He says: “All they do is tie you to an incredibly small spot, meaning you will tend to struggle in differing market circumstances.

“It is like comparing a railway with a car, where one is stuck on one set of tracks and the other can go almost anywhere. The successful funds will be those that can long and short without those ties.”

Informed Choice director Martin Bamford says: “That is always the risk with a fund with this type of mandate but for a client and adviser it is good to know what shape a fund will be and have the certainty that it will not change overnight.”

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