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Morningstar cautious on Newton income

Morningstar says it will not recommend the £1bn Newton income fund, citing manager Christopher Metcalfe’s unimpressive retail record and lack of experience in running international stocks.

The fund analysis provider says it is also concerned that the fund has had four managers in less than four years.

Newton income was a perennial favourite when run by Robert Shelton, who achieved the distinction of being the only fund manager to hold a Standard & Poor’s AAA rating for 11 consecutive years.

Morningstar analyst Chetan Modi says the fund then slipped off the radar, delivering languorous performance under Nick Clay and Rob Marshall-Lee who ran the fund from January 2006 until Metcalf took the reins.

He says Metcalf, who joined Newton from Schroders in April, only produced middling returns broadly mirroring the index on the Schroder UK equity fund he ran between 2003 and 2006.

Modi says he is concerned that Metcalf is to continue the fund’s historical strategy of holding 10 to 25 per cent of the fund in overseas stocks.

He says: “Metcalf brings experience to it but the combination of his unimpressive record at his last charge and the lack of evidence of an ability to pick international equities concern us.”

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