A number of changes were introduced to the Old Mutual Global Best Ideas Fund on 1st January this year.
Change of benchmark
Lee Freeman-Shor, the fund's manager, has switched the benchmark index from MSCI ACWI GDP Weighted, to MSCI World Equally Weighted.
The fund's previous benchmark included both developed and higher-risk emerging markets and was constructed by taking the economic size (GDP) of each country into account as well as the size of individual companies.
The new benchmark covers only developed markets and each company accounts for an equal proportion of the index. This reduces the influence of larger companies and increases the influence of higher-risk smaller and medium-sized companies on the performance of the benchmark. Please be aware the fund is able to use derivatives which increases risk.
Given the fund has a bias to developed markets and is largely invested in medium-sized companies the manager feels the MSCI World Equally Weighted Index is a better benchmark against which to measure his performance.
Lee Freeman-Shor's role
Until 1st January 2016, Lee Freeman-Shor’s role was to select underlying managers to run each portion of the fund. Each fund manager he selected was responsible for choosing 10 of their best ideas to provide exposure to the sector or region they had been chosen to cover. He was, in effect, a manager of managers.
In addition to his role of underlying manager selection, Lee Freeman-Shor is now able to invest up to 10% of the fund into individual shares and will be responsible for managing the fund’s European investments. James Inglis-Jones, who was previously responsible for the fund’s European investments, has had his investment remit widened and will run a global portfolio.
Our view on this fund
The fund has undergone a number of changes in recent years and is no longer the proposition we were originally positive on. Lee Freeman-Shor has experience managing UK funds, but is largely untested in Europe. We therefore view his shift in responsibilities with trepidation. Investors seeking exposure to the global stock market might wish to consider our current selection of Wealth 150 funds.