View more on these topics

Rating company slams ‘redundant funds’

Morningstar has issued a warning on sector-specific and region-specific funds.

Head of personal finance Christine Benz says the funds are likely to be redundant in most portfolios and poor investment timing by clients often damages returns.

Regional funds include Fidelity’s recently launched China special situations investment trust managed by Anthony Bolton while sector funds include Jupiter’s £1.1bn global financials fund managed by Philip Gibbs.

Benz says: “If investors have got a well diversified portfolio, they probably already have exposure to that sector or region, so they are redundant.”

She says investors’ timing with such funds tends to be “terrible” so they often fail to reap the high levels of total returns often published by providers.

Other sector-specific funds include the £2.5bn BlackRock gold and general fund managed by Evy Hambro.

Benz says many thematic funds such as green and climate-change funds are set up just to give the providers “a quick buck” and not to benefit investors.

She says: “By the time the company gets around to setting up a fund, the theme is often well reflected in security prices, so I think these funds can be risky and you do not always know what to expect in them. They are often not very focused.”

Fidelity International product manager James Cook says: “More than 60 per cent of GDP growth in 2009 came from emerging markets, yet allocations to the growth regions of the world remain at a minimum level.

“What we are seeing is investors increasing these allocations via global funds or regional-specific funds.”



MP calls Sants to Commons to explain FSA’s Keydata role

Government whip Chloe Smith has demanded a meeting with FSA chief executive Hector Sants over the collapse of Keydata. Smith, who is Conservative MP for Norwich North, wants Sants to visit Westminster to explain the FSA’s role in the crisis. She has already met Financial Services Compensation Scheme chief executive Mark Neale to seek information […]

Gartmore suffers net outflows of £1.65bn

Gartmore suffered net outflows of £1.65bn for the first half of the year, more than double its net outflows over the same period last year. This period included the investigation into its star manager Guillaume Rambourg, who eventually left the firm last month. Some £80m of the mutual outflows recorded during July were related to […]


Interest rates could rise to 8% by 2012

The Policy Exchange has warned that interest rates could rise to 8 per cent by 2012 if inflation spirals out of control. The think tank’s chief economist Andrew Lilico says the Bank of England may be forced to dramatically increase the base rate due to rapidly rising inflation. This is in stark contrast with Ernst […]


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