The fund, which is managed by Frank Manduca, is down 16.1 per cent in the past 12 months compared to an 8.1 per cent fall in the UK smaller companies.
Hargreaves Lansdown senior analyst Meera Patel says the fund’s objective allows it to invest in medium sized companies, which proved more resilient during the economic downturn compared to its smaller counterparts.
She says: “Frank Manduca did not make use of this flexibility preferring to keep the portfolio focused on the small end of the universe, and this has hindered overall performance compared to its peers. Our research shows his stock selection has also been poor.
“Frank Manduca has recently repositioned the portfolio towards the more economically sensitive areas of the market like the financials and retailers and the initial signs are encouraging. In our opinion therefore, existing investors should continue to hold. We will however closely monitor the manager’s progress and let investors know if our view changes.”