What to do when your fund has a change of manager

Sam Slator 26/07/2017 in Basics

As in every walk of life, sometimes fund managers change jobs. They may move to another fund company or start a new career, be given responsibility for a new fund or decide to take a break. Sometimes the choice is theirs, sometimes it is not, particularly if performance has been consistently disappointing. So sometimes it is good news, and other times bad news that your fund may now be under new management.

To help you navigate these changes, we will update our website regularly with Elite fund manager changes, so that you can decide if you want to remain invested in the fund or switch to another. We will tell you when funds have gained or lost Elite Ratings. We will also keep you informed via our newsletters, so if you are not already signed up, you may like to do so now.

Changes to Elite Rated funds

As a fundamental part of our analysis takes into account the track record of the fund manager on a particular fund, in the vast majority of cases, the fund is likely to lose its Elite Rating if the manager is changed. This means the research note on the fund will be removed from our website in due course.

Stick or switch?

There is no water-tight rule. Each instance has to be considered on its own merits. There is no rush, however, and certainly no need for a knee-jerk reaction.

If the situation arises for you, here are five points to consider to help you make your decision:

  1. Will the investment process stay the same, or will there be substantial changes to how the fund is run and in what it invests? If there will be changes, are you comfortable with them?
  2. What experience does the new manager have when it comes to running this particular type of fund? The manager may have run a similar type of fund before, so have a look at their track record. If they haven’t, do you think they can make the transition successfully?
  3. Does the new manager have any other commitments – do they manage other funds or have responsibility for other personnel? If so, do you think they can cope with the extra work load?
  4. What kind of support does he/she like and need and do they have access to this resource?
  5. Will the new manager have to manage a large amount of outflows if other investors switch to a new fund or inflows if large numbers of new investors want to entrust their money to him/her?
This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.