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Farrow’s view

Imagine if Madam Tussauds had a gallery dedicated to fund management. Which canny investors would make the podium?

Warren Buffett and George Soros would probably both figure while “supermum” Nicola Horlick would be the ideal representative for the fairer sex.

For light relief, you might have Peter Young, the former Morgan Grenfell fund man-ager, sporting his favourite floral frock but you can bet your bottom dollar that one slightly balding City slicker will be among the elite clan of waxwork models – Fidelity’s Anthony Bolton.

In a year when the sales of Isas and unit trust have plummeted to new depths, his special situations fund continues to buck the trend and has attracted shedloads of money. The fund has raked in a staggering 1.1bn (and counting) in a little over 12 months.

Putting that into perspective, it is double what other highly regarded managers have attracted over the same time. These include stalwarts such as Neil Woodford, George Luckraft and anybody from New Star, one fund group which is enjoying rising sales. The special sits fund is now the biggest retail fund in the UK and is more than 4.4bn in size.

There is little wonder why people are not tiring of Bolton just yet. Statistics of the fund’s performance are truly remarkable. An outlay of 1,000 at launch in December 1979 would be worth around 103,000 today. The fund is in the top quartile of the UK all companies sector over one, three, five and seven years while it has been in the top 25 per cent of funds in a dozen of the last 15 annual periods.

The last time Bolton failed to beat the FTSE All-Share index was in 1998. I am prob-ably just one of many who are cursing our luck never to have put any spare cash in Bolton’s more than capable hands. The question is whether now is too late. A few eyebrows have been raised among professional investors who are starting to wonder whether Bolton can continue to churn out the same high standard of performance figures year after year with a fund so big.

Fidelity argues that the same cynics were stirring the pot some seven years ago when the fund hit the 1bn mark and that performance has not been affected. It has a point. But size is not just the issue. In the good old days of the Isa season, jealous rivals of Fid-elity used to start rumours that Bolton is to retire in the hope of diverting business in their direction. It never worked, of course.

Besides, Bolton, 55, has committed himself to the fund until the end of 2006. After that, who knows? Fidelity is making no secret of the fact that the day will inevitably come when Bolton says enough is enough. Why else are up and coming managers such as John Stavis of the income plus fund and Sanjeev Shah of UK aggressive being increasingly paraded in front of IFAs and journalists? Fidelity will talk all day long about its investment approach but let us be honest, Bolton is a one-off and has a natural gift for investing which simply cannot be taught. What is intriguing is that special sits is conspicuous by its absence in many fund of funds portfolios – Credit Suisse, Gartmore and New Star to name but three. Fund of funds managers who do not own Bolton’s fund all make a point of saying they have nothing but respect for his record. However, they prefer smaller, nimble funds and are on the hunt for the Boltons of the future.

That is part of their remit, of course, but you cannot help feeling that some may have cut off their nose to spite their face. The fact that Bolton looks set to down tools in less that two years certainly sows seeds of doubt into a potential investor’s mind. Bolton is due one of his sticky years and when he does have the odd off period, special sits tends to be have a stinker.

But would you be prepared to bet against Bolton outman-oeuvring his peers or young pretenders over the next couple of years? With a track record such as Bolton’s, I am not sure any bookmaker not decamped at Cheltenham will offer you any odds worth taking. Just go with the flow. The time to really start worrying is when Bolton finally gets his gold watch and waves goodbye.

Paul Farrow is a personal finance reporter at The Sunday Telegraph

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