What to do when your fund has a change of manager

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?