The Martin Currie Global Alpha Fund has been removed from the Wealth 150, our list of favourite funds for new investment in each sector.
The fund was originally included on the Wealth 150 list as Martin Currie had a superb long-term track record managing global funds. This track record was built on an approach developed over a long period of time, which focuses on identifying high quality companies that are undergoing positive changes. This fund was launched in 2006, initially delivering strong returns.
However, it has struggled since the start of the credit crunch. We had expected performance to improve as the market recovered, but although it delivered positive returns in 2009 it has continued to lag behind its peers.
In particular, our research indicates that the fund suffered from poor stock selection in 2009. Two holdings were especially detrimental. The first was US healthcare company CVS Caremark, whose deteriorating prospects the team at Martin Currie failed to identify. The second was National Bank of Greece, whose shares fell on the back of the country’s debt problems. Both companies have since been sold from the portfolio.
At this stage we are not suggesting investors sell the fund – Martin Currie’s approach is well established and we expect it to do well over the longer term. The fund has recently been positioned to benefit from the improving prospects of the technology sector, and also has a bias towards the financial sector, including banks.
The managers, James Fairweather and Neil Robson feel that this positioning will enable the fund to prosper in the current environment, and encouragingly there have been signs of a pick-up in performance this year. However, this has been over a very short timeframe following a longer period of underperformance, and we would like to see more consistent returns before suggesting that new money is invested in the fund.
In the meantime, we shall continue to monitor the fund closely and keep investors informed of our views.
The fund was originally included on the Wealth 150 list as Martin Currie had a superb long-term track record managing global funds. This track record was built on an approach developed over a long period of time, which focuses on identifying high quality companies that are undergoing positive changes. This fund was launched in 2006, initially delivering strong returns.
However, it has struggled since the start of the credit crunch. We had expected performance to improve as the market recovered, but although it delivered positive returns in 2009 it has continued to lag behind its peers.
In particular, our research indicates that the fund suffered from poor stock selection in 2009. Two holdings were especially detrimental. The first was US healthcare company CVS Caremark, whose deteriorating prospects the team at Martin Currie failed to identify. The second was National Bank of Greece, whose shares fell on the back of the country’s debt problems. Both companies have since been sold from the portfolio.
At this stage we are not suggesting investors sell the fund – Martin Currie’s approach is well established and we expect it to do well over the longer term. The fund has recently been positioned to benefit from the improving prospects of the technology sector, and also has a bias towards the financial sector, including banks.
The managers, James Fairweather and Neil Robson feel that this positioning will enable the fund to prosper in the current environment, and encouragingly there have been signs of a pick-up in performance this year. However, this has been over a very short timeframe following a longer period of underperformance, and we would like to see more consistent returns before suggesting that new money is invested in the fund.
In the meantime, we shall continue to monitor the fund closely and keep investors informed of our views.
