View more on these topics

IFAs won&#39t risk their shirts on favourites

There is no secret to guaranteed success when it comes to choosing a fund


Investment IFAs claim if there was such a road to riches, they would all

have retired a long time ago.

But each has their favourite fund managers which they believe are good

bets for long-term growth. These vary between well-established firms and

those which do not have the reputation of the bigger players but have the


But if a favourite fails to perform for any reason, IFAs can be quick to

switch their bets.

Recent turbulence at Jupiter Asset Management alienated some IFAs although

most are still supportive. The fund manager has lost star performer William

Littlewood and also gone through changes to its corporate structure.

IFAs are waiting to see if the changes have a negative impact on

performance. They are telling Jupiter investors to hang on to investments

but not promoting it to newcomers.

Chartwell Investment Management chief executive Craig Wetton says: “I

would disagree with whoever comes up with the statement that it is time to

leave Jupiter.”

Perpetual is another former favourite which has been through the mill

recently. Year after year, the multi-award winner delivered consistent

returns and IFAs eagerly recommended it to their clients.

But the boom in technology, media and telecommunications stocks saw

Perpetual&#39s performance plummet. Not willing to pay the huge multiples

often required to take a significant stake in tech stocks, it found itself

under-weight in this sector.

It has taken a beating by IFAs from which it has never really recovered.

It is seen as a has-been that does not rank among the top performers.

Chase de Vere investment adviser Justin Modray says for his money – or,

rather, that of his clients – the top-perfor- ming fund manager is

Fidelity. To round up his top five, he includes Newton, Invesco GT, Save &

Prosper and Henderson and Threadneedle inequal fifth place.

Modray excludes both Jupiter and Schroder from his top tips. “Jupiter may

come through all right if it keeps its fund managers. Schroder, though, has

gone through a bit of turbulence. Its performance has taken something of a

dive. It will likely take two to three years to reassert itself,” he says.

Looking to the possible favourites of the future, Chamberlain De Broe

consultant Michael Bakowski likes Henry Cooke&#39s range of Solus funds, which

he says are especially good for those willing to invest in high-risk


The Solus range includes an Eastern enterprise trust focusing on emerging

markets and a special situations fund which invests in smaller companies in

the UK.

Bakowski says, being a smaller player, Cooke has the ability to stay

nimble and change its positions or strategies easily without the market

taking much notice.

Optimus is another name that IFAs believe could be a future star. It has

embarked on an aggressive advertising campaign, including the boast that it

will be the next Jupiter. IFAs are sceptical about this claim but do like

the possibilitiesthat it offers.

ABN Amro is another relatively new player that is performing well. Several

industry analysts mention it as a fund manager they are looking to more and


Modray says: “ABN Amro is one to definitely watch out for.” He also likes

Britannic Asset Management, which he says does not get much notice compared

with some of itsbigger competitors but provides a consistent level of good

service and has been rated highly by Standard & Poor&#39s Fund Research.

“It has not crossed that line into being a household name. It has a very

strong management team, rather than one star fund manager,” says Modray.

Wetton is an admirer of Schroder&#39s Medical Discovery fund, despite the

company&#39s rather poor performance across many of its other funds. He thinks

the healthcare sector has great potential given the pace of technology.

When it comes to choosing a fund manager, IFAs say they start by looking

at a particular sector and then see who is performing best in that area.

An obvious case is technology stocks. It is commonly accepted that the

technology bubble has burst. Stocks and funds were greatly overvalued

although the majority of companies had yet to turn a profit. Tech funds

were growing at rates as high as 193 per centa year. It was inevitable

forthe market to correct itselfand it has done so over the last few months.

Advisers say they are wary of advocating further investment in this

sector. But many believe the technology revolution will continue. Given

this, they are willing to suggest certain funds which are still decent bets

because of their diversified investment attitudes.

At the end of the day, IFAs are reluctant to say who they think will be

the next Jupiter or Perpetual.

They have no problems recommending fund managers which, in their opinion,

are performing well but that is as far as most are willing to go. They

accept the often arbitrary nature of the business they work in.

If there is a golden rule in the game, it is diversification. No matter

how well any one fund manager seems to be performing, it is unwise to

invest everything in them because, time and time again, it has been proven

that performance may go down as well as up.

Bakowski says: “The obvious truth about investment is that if you have

spotted the bandwagon it is already too late.


The Bellwether for mutuality?

Despite Standard Life members rejecting the advances of carpetbagger FredWoollard last week, group manag-ing director Scott Bell dec- lared therewould be no Champagne after the victory.The muted celebrations followed criticism that the life office had notfully explained to members the pros and cons of mutuality and plc statusdespite spending more than £10m on the campaign […]

Mind the gap

It takes a lot to be an IFA. Even after qualifying, there is regulatorypressure to demonstrate professional competence continuously.FSA head of industry training David Jackman, says: “One exam taken at theoutset of a career does not guarantee competence through a person&#39s workinglife, hence, CPD needs to be prominent.”How does an IFA keep up with new […]

Benefiting from the pre-April 2001 regime

This Bill is important to pension professionals because it is the enablinglegislation for the proposed changes to pension taxation which include thenew regime beginning on April 6, 2001.This new regime will encompass stakeholder pensions, new and existingpersonal pensions and those money-purchase occupational schemes which optto be included.The commentary to the Finance Bill 2000 contains a […]

Scottish IFA in joint venture with law firm

Scottish IFA Futurity has joined forces with law firm Fyfe Ireland to forma financial services company providing independent advice to the lawyer&#39sclients.The new company will offer advice on corporate business, includingemployee benefit schemes and group pensions as well as personal financialadvice encompassing investments and pension planning. It says stakeholderpensions will be a key area in […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm