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Hargreaves Lansdown drops Skandia UK best ideas from Wealth 150

Hargreaves Lansdown has dropped Skandia’s UK best ideas fund from its Wealth 150 range.

Hargreaves Lansdown has been big supporters of the fund since its launch in October 2006, however the firm says the performance has been disappointing recently.

Hargreaves says that investors should not consider selling the fund at this stage but wants to see evidence of improved performance following recent changes made by Skandia to the manager line-up in the UK best ideas fund.

Skandia UK best ideas fund operates by giving mandates to 10 of the UK’s highly regarded managers who then select their best 10 stock picks.

The fund has struggled since launch having fallen by 27.62 per cent to February 10, 2010, according to figures from Morningstar, this compares to a 6.58 per cent fall for the UK all-companies sector.

Skandia has looked to tackle performance by amending the make-up of the fund by reducing the number of managers from 10 to seven. Those fund managers taken were Jupiter’s Tony Nutt, River and Mercantile’s Dan Hanbury and the Ignis Cartesian duo of Andrew Kelly and David Stevenson.

Hargreaves Lansdown senior analyst Meera Patel says: “The fund got off to a good start and initially delivered strong returns. However, it suffered during the credit crunch. While it has recovered somewhat since the market bounced in March last year, the recovery has not been as strong as we had expected – the fund initially performed in line with the market but since mid-October last year it has underperformed. We expected far better performance from this fund.

“We believe the structure of the fund is sound. Bringing together the 10 best ideas of some of the best fund managers in the UK should deliver above average returns. Each of the managers above is first class and so, if Skandia can find the right combination, we believe the fund could once again start to outperform in the long run.”

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