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Gartmore is adding M&G fund to boost large-cap exposure

Gartmore has added the M&G capital fund to four multi-manager funds to increase UK large-cap exposure through a fund which it describes as “benchmark-aware but not benchmark-constrained”.

Small and mid-caps have performed well over the last 18 months but Gartmore believes valuations are now less attractive. It expects future outperformance to come from large caps, particularly within funds that are not slaves to their benchmarks.

M&G capital is run by Mike Felton, who previously managed the Royal & Sun Alliance UK prime fund, which Isis inherited following a merger of the two groups.

Gartmore’s multi-manager team has followed Felton for six years and invested in Felton’s UK prime fund when they worked for Insight.

The M&G capital fund has a large-cap bias and is managed along the same lines as the UK prime fund, with a concentrated portfolio of 30-60 of Felton’s best stock picks.

Gartmore head of multi-manager Bambos Hambi said: “There are so many funds in the universe but it is only worth investing in the top 10 to 20 per cent although you still have to look at the other 80 per cent. Mike is in that top 10 to 20 per cent and has always been a large- cap manager.

“For us, it means that we know exactly what we are buying. If we are combining funds, we want to be comfortable that the fund manager is going to do what he says he is going to do for some time.

“Key to the success of Isis prime was the strength of the analytical resource at the group. The same can be said of M&G capital and we are more than comfortable with the quality of the UK team at Mike’s disposal.”


Nic Cicutti

An editor whose professional opinions I have always respected once advised me that, when writing a column, one should never return to the same subject three times in a row.

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