Hargreaves Lansdown has said the Franklin Templeton UK Mid Cap fund will remain in the Wealth 50 as Richard Bullas takes the lead for the first time, stating it does not expect him to deviate much from outgoing manager Paul Spencer’s approach.
Last week Franklin Templeton announced Bullas (pictured) would replace Spencer as lead manager on the £1.4bn fund at the end of June when Spencer steps back from all portfolio management responsibilities before he retires officially on 30 September.
Hargreaves analyst Jonathon Curtis said it was “a shame to hear Spencer’s retiring”, describing him as “an excellent manager” who “has delivered excellent performance over the long term” by investing in high-quality mid-sized companies.
The Franklin Templeton UK Mid Cap fund currently sits in the D2C firm’s Wealth 50 list of favourite funds.
Bullas replacement to result in few changes over the short-term
But Curtis said Hargreaves expects there to be few changes to the fund over the short-term on the basis Bullas will “follow a similar approach” to Spencer.
Bullas has “lots of experience” analysing higher-risk small and medium sized companies and has been co-managing funds at Franklin Templeton since 2012, he said in a note on Friday.
However he acknowledged that “this will be his first time as the sole lead manager of a fund at Franklin”. “That said, he’ll continue to have the input of the wider team, who we’ve rated highly for many years,” he added.
Fund Calibre had ‘no choice’ but to yank fund’s rating
Hargreaves’ continued endorsement comes as other research houses have dropped the fund.
Fund Calibre dropped the fund from its elite rankings following news of Spencer’s retirement last week. Managing director Darius McDermott explained the firm’s rating process starts with alpha generation at a manager level so the team “had no choice but to remove the rating”.
“Even though Richard has worked closely with Paul, it’s impossible for us not to believe the alpha was coming from Paul,” he said.
Hargreaves Wealth 50 dropouts
Hargreaves has ditched funds from its Wealth 50 list following manager changes previously. Last April it cut Schroder Tokyo from its list of best buy funds after veteran Japan manager Andrew Rose’s retirement.
Several other Wealth 50 funds have fallen by the wayside since Hargreaves unveiled a slimmer version of its best buy list in January 2019.
The platform group axed the Sanditon European fund in October as the mandate was handed over to Crux’s Richard Pease and more recently ousted Tom Dobell’s £2bn M&G Recovery fund, a move which commentators described as a long time coming.
By far the most high-profile drop out was the Woodford Equity Income fund. Hargreaves, a long-time cheerleader of Neil Woodford, ejected the fund days after it suspended trading after being unable to cope with a heavy wave of redemptions.
