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Bestinvest axes fund rating on wealthbuilder

Bestinvest has removed its rating on Fidelity’s £935m wealthbuilder fund, citing poor performance of the firm’s underlying Fidelity-run Oeics.

Wealthbuilder has been managed by Richard Skelt since launch in 1996. It has been a big hit with investors but has struggled in recent times, producing third-quartile returns over one and three-year periods in the IMA global growth sector.

Wealthbuilder invests in Fidelity Oeic sub-funds, with 40 per cent of the exposure in the UK.

Bestinvest adviser Tom White says: “Performance was strong for a long time, buoyed by good numbers across the Fidelity fund range, but in recent years it has been in line with the benchmark or worse, partly due to a downturn in those same Fidelity funds.

“This period has also seen an expansion in the fund of funds market, with most of the new funds able to invest across the market and some able to access multiple asset classes.”

Bestinvest has also downrated Bill Miller’s Legg Mason US equity fund to hold status. It says that the fund has fallen out of favour in the past two years, having underperformed by 25 per cent.

Bestinvest senior research analyst Stephen Marriott says that the main issue has been Miller’s conviction for banking and financial stocks, hit by the sub-prime crisis, plus a lack of exposure to rising oil and gas stocks.

He says: “Although we believe that Miller will bounce back in the long run, we feel that the current investment climate will continue to be difficult for his portfolio.”

Marriott highlights Martin Currie North American and M&G American as less volatile American options that investors may want to consider.

Fidelity and Legg Mason were unavailable for comment on the issue.


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