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Steer clear of smaller companies funds, says Merrill chief

Merrill Lynch fund manager Richard Plackett has told IFAs to steer clear of 80 per cent of smaller companies funds after branding their performance unacceptable.

UK smaller companies chief Plackett says only 12 of the 62 funds in his sector have an acceptable performance level.

He believes that advisers should not put up with investment performance that fails to beat the performance of cash. His own fund has returned 60 per cent over the last five years.

Plackett, whose £67.5m fund is currently ranked sixth in the index, believes that all the funds which are performing well have done so because of solid research and in-depth company meetings.

He believes funds have to make absolute returns and that managers need to detach themselves so that they do not fall in love with stocks that have performed well.

Plackett says: “Any fund that does not beat cash should be unacceptable to IFAs. They need to ask themselves why they are investing in that fund and take their money away. It is not acceptable in any sector but particularly not in small or mid caps.


Fidelity focuses on China

Fidelity Investments has established a Luxemburg-domiciled Sicav that invests mainly in companies based in mainland China and Hong Kong or those deriving most of their income from this region. Unlike greater China funds which invest in the surrounding areas such as Taiwan, this fund is 90 per cent invested in China itself. In keeping with […]

Brace yourself for nasty surprises

At least a debate has started about alter-natives to the Financial Services Compen-sation Scheme. The FSA appears to be willing to listen and is even making some suggestions. The LIA and Ken Davy are now backing a product levy, with Davy adding ruefully that he advocated the idea a decade ago before it was rejected. […]

Bankhall to debut Axa&#39s new range

Axa is unveiling a major initiative which will make Bankhall a key partner for the launch of its protection proposition in November. The IFA services provider will be a major distributor of products from Axa&#39s new range, which will encompass a menu-based proposition. Members will be able to take advantage of Axa products and services. […]

Standard Sipp boasts tax-efficient dripfeed

Standard Life is offering a new self-invested personal pension for clients looking for greater control of their pension fund. It offers immediate basic-rate tax relief on contributions to maximise investment opportunities and is available as a single-charge version for customers invested entirely in its Sigma range of funds. The Sipp will provide access to direct […]

Trusts and Taxations

Take a look at the trusts and trustee taxation video – The definition and classification of trusts. Once you’ve viewed the boxset, visit our Test Centre to test your learning and get your CPD certificate. View here


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