Merian fund downgraded as Buxton takes the helm

Simon Murphy exited Merian UK Equity at the start of the year

Morningstar has downgraded the Merian UK Equity fund following the appointment of star fund manager Richard Buxton (pictured) to the helm.

Buxton took over the fund from Simon Murphy on 1 January 2019, a week before the asset manager announced he would be stepping back as chief executive.

The £133.2m fund has dropped to a Morningstar rating of neutral from bronze.

Morningstar manager research ratings director Jonathan Miller said the change had been due to the extent to which Murphy had shaped the strategy after a decade at the helm.

“Buxton will run this alongside his responsibilities on the flagship Merian UK Alpha fund, looking to bring it in line with his style. It is too early to see how this plays out, which reinforces the neutral rating,” Miller said.

Merian Global Investors did not wish to comment on the fund’s downgrade.

Hargreaves Lansdown analyst Dominic Rowles said earlier this month that the UK Equity fund had not performed well under Murphy and that Buxton had the potential to improve performance “although there are no guarantees”. The D2C platform dumped Buxton’s UK Alpha fund from the Wealth 50 as part of the buy list’s revamp this month.

Merian UK Equity performance

1yr3yr5yr10yr
Merian UK Equity-15.7811.1610.80151.78
IA UK All Companies sector-8.6722.4923.96163.31
FTSE All Share-8.0927.9126.60147.94
Source: FE Analytics

Willis Owen head of personal investing Adrian Lowcock still likes Buxton due to his long-term, contrarian approach to stock selection, but says he will still wait to see how he performs with the UK Equity fund.

Lowcock said: “The key issue I think is how this fund will differ from the UK Alpha fund and how will Buxton manage an all-cap fund when he has typically had more of a large cap focus. How will changes to the fund affect performance and risk. While these issues are outstanding, it makes sense to stick with his more well-known UK Alpha fund and adopt a wait and see approach on the other fund.”

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