Wealth Shortlist Update: EdenTree Responsible & Sustainable Managed Income

We've taken the decision to remove the EdenTree Responsible & Sustainable Managed Income fund from the Wealth Shortlist.

Chris Hiorns, the fund's lead manager, will be stepping down as manager of the EdenTree Responsible & Sustainable Managed Income fund on 1 March 2023. Hiorns will remain at EdenTree and this change will allow him to focus his time on the European equity fund that he manages.

Gregory Herbert will take over as lead manager of the fund, with Michael Sheehan helping to manage the bond investments within the fund. Herbert joined EdenTree in October 2022 from Jupiter Asset Management and Sheehan joined from abrdn in 2021.

Herbert has experience in managing equity funds, with a focus in more recent years on equity income investing. He plans to keep the broad way that the fund is managed similar to Hiorns, however has confirmed that there will be a number of changes to the companies held within the shares part of the fund over the next few months. Similarly for the bond part of the fund, Sheehan has confirmed that while the majority of the bond issuers will remain the same, he expects to rotate many of the investments into bonds that have higher credit ratings and are higher up the issuing company’s capital structure.

These changes are the second set of management changes within the last two and a half years for the fund, with Hiorns having only taken on management responsibility from Robin Hepworth in November 2020. Hepworth had run the fund for around 25 years. Our conviction in the fund was based around Hiorns continuing to run the fund in the same way as Hepworth before him.

Our View

A second set of changes to the managers of the fund in relatively short succession, alongside proposed changes to the investments held in the fund, reduces our level of conviction. Our conviction in the management of the fund lies with Hiorns and we don’t feel the track record of the new managers is sufficient for the fund to retain its place on the Wealth Shortlist.

In addition, we do not feel the succession management has been well communicated by EdenTree and we have been given a limited period of time to assess these changes. The combination of these factors means we have removed the fund from the Wealth Shortlist.

Although we're removing the EdenTree Responsible & Sustainable Managed Income fund from the Wealth Shortlist, this isn't a recommendation to make any changes to a portfolio. Investors should make sure any investments match their investment goals and attitude to risk and are held as part of a diversified portfolio. If you're not sure if an investment is suitable for your circumstances, please seek personal advice.

Past performance is not a guide to the future. Source: Lipper IM to 31/01/2023. Income has been reinvested in the above figures.

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