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Trimming the fat

Last week Invesco Perpetual decided to take the plunge on its struggling US range after announcing its intention to merge the trio of funds down to a single vehicle.

For some time now the range has been a thorn in the heavyweight asset manager’s side with all three vehicles producing fourth quartile returns over three years according to the IMA.

The plight of the funds has also been highlighted by Bestinvest’s latest Spot the Dog survey which reveals funds that have failed to beat their benchmark index in each of the past three years and underperformed their index by 10 per cent over that time.

All three funds made the list.

Invesco has already seen a managerial change on the fund with Ian Brady leaving the firm in December 2007 and with Andrew Shard taking over at the helm in February this year.

The plan is to bring both the £20m US smaller companies and £8m US aggressive funds into the £294m US equity fund, with the newly merged vehicle focusing on larger companies.

Invesco Perpetual chief executive and chief investment officer Bob Yerbury
says: “Invesco Perpetual first launched a US equity fund in September 1983 and as a group we have 25 years experience in managing US equities from Henley. In focusing our investment expertise into a single broad-cap US equity fund and with the recent appointment of Andrew Shard we are taking the necessary steps to reinvigorate our US equity business.”

Meanwhile, Schroders managing director of UK retail Robin Stoakley believes boutique fund firms will struggle to keep up with their larger counterparts given the current demand for products in the market.

Stoakley says that while boutiques have done well to forge a place in the market they will struggle to keep up with the growing call for niche and innovative products.

He says: “If you look at the Schroders agriculture fund and the income maximiser and the likes of BlackRock UK absolute alpha, you can see that some of the bigger fund firms are responding to this demand by using deep resources to produce attractive and innovative offerings. This is something that the boutiques will find hard to duplicate.”

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