The Standard Life Global Equity Unconstrained Fund has been removed from the Wealth 150 list of our favourite funds in each sector.
The fund’s strategy was changed several years ago to allow the manager to place greater weight behind his highest conviction ideas. This change initially reinvigorated the fund and it performed well in the early days of its restructure.
It has, however, since struggled to perform consistently. The last three years have been unprecedented for global stock markets and have seen the worst financial crisis since the 1930s. Along with many others, this fund suffered in the downturn, but bounced back strongly as the market rebounded in 2009. We were hopeful the fund’s recovery would continue but performance has once again been mixed this year.
There has also been a change in manager. Lance Phillips stood down in July this year to concentrate on his role as Head of Global Equities. He has been replaced by Mikhail Zverev, who has been involved in the management of this fund for some time and has a similar strategy to Lance Phillips. However, he remains relatively inexperienced in managing a global fund and we would like to see whether he can generate more consistent returns for investors.
We still believe the fund’s approach has the potential to reward long-term investors, and would stress that this is not a recommendation to sell the fund. We feel that generally speaking existing investors should continue to hold the fund provided it still meets their objectives. However, owing to its patchy performance and the recent change in management, we feel there are better options in the sector for those wishing to invest new money.
We have therefore removed the fund from the Wealth 150. We will continue to monitor it closely, and if the new manager demonstrates an ability to deliver consistent outperformance, we will consider it for re-inclusion. We will of course keep investors fully informed of our views.
