How should investors react to fund manager moves?
Posted by: Brian Dennehy
2013 has already seen a fund manager merry-go-round. It began with Richard Buxton leaving Schroders, and now Paul Griffiths at Aberdeen and Mark Lyttleton at BlackRock. Most recently it was announced that Alex Wright will take over Fidelity Special Situations from star manager Anthony Bolton. Here are our thoughts on this announcement and action you should take on fund manager moves generally.
The key question for investors is whether the new man at Fidelity Special Situations is any good. On this there is really no problem – he is outstanding. But ultimately we don't really care.
In 30 years we have never known any good fund (i.e one we recommend) becoming a bad fund due to a change in management.
Fund managers come and go, they are caretakers. They have processes (some more formal than others) which can comfortably be continued by another manager. If this was previously a good fund, any new manager would have to be extremely stupid to change the recipe for success. Big funds from fund houses are not run “seat of pants”.
And when a fund manager leaves the house is highly incentivized to get the handover right, and very publicly.
ACTION FOR INVESTORS
The interest around fund managers coming and going is mostly noise, and investors are best advised to ignore it.
You should only switch if the fund manager move prompts you to realise it was never a good fund in the first place!
Review your funds quickly using our 'Rate my Funds' tool here and we will suggest better alternatives if necessary