Hargreaves Lansdown has removed Carl Stick’s underperforming Rathbone Income fund from its list of favourite vehicles.
The adviser firm has removed the fund from the Wealth 150 because Mark Dampier, the head of research, says the manager has failed to add value through stock selection despite attempts to reinvigorate the portfolio.
On the Hargreaves Lansdown website Dampier says: “Recent performance has been disappointing and the fund has lagged behind its peers. It has been an extremely challenging market for everybody but our analysis indicates that the manager has not been adding value through stock selection. A relatively high exposure to smaller companies has also been a hindrance, since this area of the market is especially sensitive to the economy.”
Recently Stick has shown “signs of encouragement” but performance has failed to pick up. Over the year to April 6, the fund posted a loss of 32.5% compared with the UK Equity Income sector average fall of 27.9%, according to Financial Express.
Dampier adds that whilst performance is a concern, Hargreaves Lansdown is not advising current investors to sell, but to continue to hold because of Stick’s longer-term track record.
“The fund has been one of the top performers in the sector since he took over in 2000, however in the short term we feel the recent underperformance means that new money shouldn’t be committed to the fund until we assess its future prospects.”