Blackrock’s Evy Hambro has taken on extra responsibility at the firm to oversee its thematic range of funds, but Hargreaves Lansdown says this will be negative for investors.
Hambro, manager of the Blackrock Gold & General fund for almost 10 years, said the changes to his role are a “natural extension”.
However, in a note on the firm’s website Hargreaves investment analyst, Dominic Rowles, said the expanded role could leave Hambro with less time to focus on the fund, especially as it has had a difficult year compared with the broader market of gold miners.
Likewise, Adrian Lowcock, head of personal investing at Willis Owen, said: “A manager taking on more responsibility ultimately means they have less time to focus on the existing funds they manage, the extent that the extra responsibility is an overlap to his existing areas of expertise will be the biggest determining factor on long-term performance.
“The current focus on gold and commodities often requires specialist knowledge and expertise some of which might help with aspects of a thematic fund range but is unlikely to cover all areas.”
In January, Richard Buxton announced he was stepping down from his role as chief executive at Merian Global Investors to focus on his role as head of UK equities and manager of the Merian UK Alpha Fund. The move was welcomed by investors.
Time will tell
Jason Hollands, managing director at Tilney, said that Blackrock is one of the “major players” in the resources sector and Hambro has been investing in gold mining and precious metal equities for nearly quarter of a century.
“When a fund manager takes on additional, wider leadership responsibilities, there is a risk that they will become distracted to some degree.
“However, people are entitled to develop their careers and to the extent that this keeps them motivated and committed to the business, that can also be a good thing. Time will ultimately tell whether this has any impact on Hambro’s funds but it is also the case that Blackrock have a well-resourced team in place.”
Underperformance of the fund
But HL said the fund lost money last year. This was partly because of investments in companies that finance precious metal businesses in exchange for the right to purchase future production at a discount, according to HL.
“They’ve struggled recently because rising interest rates made the returns they get on their investments look less attractive. Evy Hambro still sees plenty of potential in this area though, so he’s happy to hold on to his investments.”
Hargreaves added investing in such a specialist area is higher risk, and the manager’s flexibility to invest in emerging markets and smaller companies increases risk further. “We think specialist funds should only make up a small part of a wider portfolio.”
The Blackrock Gold & General fund isn’t on Hargreaves Lansdown’s Wealth 50 list.
