Hargreaves Lansdown advises clients to ditch Gartmore European absolute return

Hargreaves Lansdown has cut Roger Guy’s Gartmore’s European absolute return from its Wealth 150 list of recommended funds, and suggested investors switch into one of two other alternatives.

It says the manager who is taking over, John Bennett, is “capable” but it remains unclear what changes he might make to the Gartmore fund.

HL is writing to all clients who hold the fund via its Vantage platform with further details on the alternatives – the Liontrust European absolute return fund and the Standard Life Investments global absolute return strategies fund.

The switch suggestion is the latest blow for Gartmore, following the resignation of star manager Guy yesterday that came after a year of bad news for the group since it listed on the stock market. This began when Guy’s former co-manager Guillaume Rambourg was suspended in March amid an investigation into a breach of internal best execution rules. The group’s chief investment officer Dominic Rossi also quit yesterday.

Yesterday Skandia Investment Group sacked Guy as one of the nine managers on its European best ideas fund after the resignation – costing Gartmore a £32.8m mandate.

HL investment analyst Rob Morgan says: “Whilst we believe John Bennett is a capable manager having performed well at GAM, he has only been at Gartmore since the start of this year. Despite experience of running absolute return strategies at GAM, it is unclear what changes he might make to this portfolio and how he will adapt his approach.

“This uncertainty means we no longer feel this fund represents one of the best opportunities in the absolute return sector, and we believe investors should consider alternative funds.”

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  1. Absolute Return funds have been useless. What good is a fund that will by its nature underperform in a bull market when it cannot perform in volatile times either?

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