In our opinion existing investors in the RAB European Dynamic Fund should consider switching to an alternative investment.
The RAB European Dynamic Fund launched in December 2003 and until July 2008 the performance was generally good, albeit with a relatively high level of volatility. The fund then suffered badly as the credit crunch began to bite. The managers’ investments in financial companies fell dramatically, and exposure to the mining sector was a negative influence too.
These errors were compounded when the fund managers began to invest more cautiously and the fund largely failed to capitalise on the recent market recovery. We were monitoring the fund for signs of improved performance, but the fund managers Simon Acton and Alex Codrington have recently announced their resignation.
They will remain in charge of the fund while RAB search for a replacement, but we do not believe investors should wait. There are several top quality funds investing in Europe and one has recently been launched with a talented and experienced fund manager at the helm. It also takes a more aggressive stance than some of its peers.
In my opinion Richard Pease is a first rate fund manager and his New Star European Special Situations Fund is worthy of close attention.
To identify the best companies that Europe has to offer, Richard Pease focuses on understanding how and why a business makes money. By maintaining a close relationship with company management he is well positioned to identify signals to buy or sell. For example, he helped to shelter investors from some of the worst of the banking fallout in late 2008 by selling his investment in Anglo Irish Bank when management started to sell their own shares.
Richard Pease has an excellent track record of managing smaller, nimble funds where he can be more flexible in buying and selling shares. The launch of the New Star European Special Situations Fund on 1st October therefore gives him an ideal platform to showcase his talents. It will invest in a concentrated portfolio of smaller companies. The fund will fall in value as well as rise, so investors should have a long term horizon in mind and ensure they are comfortable with the risks before investing.
Unlike the RAB European Dynamic Fund, the New Star fund will focus on continental Europe and will have little exposure to the UK. There is only a small number of funds in the “Europe including UK” sector and in our opinion none of them is really exceptional. For this reason we have highlighted one of our favourite funds specialising in continental Europe.
We have high hopes for the New Star European Special Situations Fund and have no hesitation in adding it to the Wealth 150, our list of favourite funds in each sector. We are confident it will merit its position in years to come.
What next?
If you are an investor in the RAB European Dynamic Fund please read the key features for the New Star European Special Situations Fund and then consider your options. If you decide to switch and are registered for our online service, simply log into your account to place your instruction online. Alternatively you can call our dealers on 0117 980 9800. Please have your Master Password to hand.
Mark Dampier, Head of Research
The RAB European Dynamic Fund launched in December 2003 and until July 2008 the performance was generally good, albeit with a relatively high level of volatility. The fund then suffered badly as the credit crunch began to bite. The managers’ investments in financial companies fell dramatically, and exposure to the mining sector was a negative influence too.
These errors were compounded when the fund managers began to invest more cautiously and the fund largely failed to capitalise on the recent market recovery. We were monitoring the fund for signs of improved performance, but the fund managers Simon Acton and Alex Codrington have recently announced their resignation.
They will remain in charge of the fund while RAB search for a replacement, but we do not believe investors should wait. There are several top quality funds investing in Europe and one has recently been launched with a talented and experienced fund manager at the helm. It also takes a more aggressive stance than some of its peers.
In my opinion Richard Pease is a first rate fund manager and his New Star European Special Situations Fund is worthy of close attention.
To identify the best companies that Europe has to offer, Richard Pease focuses on understanding how and why a business makes money. By maintaining a close relationship with company management he is well positioned to identify signals to buy or sell. For example, he helped to shelter investors from some of the worst of the banking fallout in late 2008 by selling his investment in Anglo Irish Bank when management started to sell their own shares.
Richard Pease has an excellent track record of managing smaller, nimble funds where he can be more flexible in buying and selling shares. The launch of the New Star European Special Situations Fund on 1st October therefore gives him an ideal platform to showcase his talents. It will invest in a concentrated portfolio of smaller companies. The fund will fall in value as well as rise, so investors should have a long term horizon in mind and ensure they are comfortable with the risks before investing.
Unlike the RAB European Dynamic Fund, the New Star fund will focus on continental Europe and will have little exposure to the UK. There is only a small number of funds in the “Europe including UK” sector and in our opinion none of them is really exceptional. For this reason we have highlighted one of our favourite funds specialising in continental Europe.
We have high hopes for the New Star European Special Situations Fund and have no hesitation in adding it to the Wealth 150, our list of favourite funds in each sector. We are confident it will merit its position in years to come.
What next?
If you are an investor in the RAB European Dynamic Fund please read the key features for the New Star European Special Situations Fund and then consider your options. If you decide to switch and are registered for our online service, simply log into your account to place your instruction online. Alternatively you can call our dealers on 0117 980 9800. Please have your Master Password to hand.
Mark Dampier, Head of Research
