By STEPHEN MARRIOTT 15/05/2008
Derek Stuart’s fund has now struggled to beat its benchmark, the FTSE All Share, for the last three years. The fund’s problems partly stem from it being hit by a number of stocks in 07/08 that have been marked down aggressively following poor trading updates.
The manager has also been gathering a number of institutional mandates in recent years and is now responsible for some £1.8bn of assets in total. Whilst the size of these assets is still manageable for Stuart, we also feel that it does place some liquidity constraints on the fund.
Derek Stuart still has an excellent long term record (Bestinvest MRI 98.4%) and although we believe he is an above average manager, we feel that he is unlikely to repeat the same level of outperformance that he’s produced in the past. Therefore our conviction level is slightly less and consequently we have downgraded his fund to three stars.