By MARCEL PORCHERON 30/10/2008
Edward Bonham Carter tries to adopt an absolute return mentality in his portfolio by buying undervalued assets. Over the long term his track record looks attractive , generating excess returns relative to the index, accompanied by an MRI score of 99% over almost 14 years. However, his track record has been strongly influenced by outperformance early in this century and he has now underperformed in four of the last five calendar years. The manager retained a high level of conviction in financial stocks, especially banks, which appears at odds with the views of their internal specialist and proved to be a poor decision. His MRI has fallen to less than 30% over both the last three and last five years and the manager has failed to meet our performance expectations over this period.
We are also concerned that his operational management responsibilities at Jupiter have detracted from his day to day management duties. The portfolio is well diversified and there is the potential for a recovery in relative performance of the fund from here so existing investors may well benefit from holding the fund. However, over the longer term we have higher conviction in other managers’ ability to add value for investors. We recommend Artemis UK Special Situations or M&G Recovery as suitable alternatives.
Downgraded to 2 stars.