Business Cycle Approach
Ben Yearsley, head of investment research at Charles Stanley Direct agrees that the market is looking a bit toppy, but points out that using a business cycle approach, at least in theory, one should be able to invest (and perform) through the cycle, so exactly when the fund is launched isn’t that important.
What is important, he says is that Dean has returned to the environment in which she outperformed.
“She had a disappointing final year at Schroders,” he said, “but she has come back to the team in which she performed very nicely and it is likely that the new fund will look very similar to the one she used to run.”
Adrian Lowcock, head of investing, AXA Self Investor, agrees that Dean’s new fund is likely to look similar to the one she previously ran, especially as she has “rejoined her form colleagues who share the same investment philosophy”.
The other consideration to make, with regards her likely performance is the size of the fund. As Peter Toogood, investment director at City Financial pointed out, Dean’s style of management, which historically has been quite mid-cap focused, and with high turnover, is better suited to a smaller fund than to the size of fund she ended up running at Schroders.
In the period between January 2005 and 8 September 2014, when Matt Hudson took over responsibilities for the Schroder UK Opportunities Fund, Dean produced a total return of 161.1%, according to FE Analytics data. But, as is evident from the graph, that the return is marred somewhat by the performance in 2014.
Dean definitely has her supporters and many that will be keen to give her their tokens come 22 June, when the fund launches. How she repays those tokens will only be known in time. There is no doubt she has the experience, she definitely seems to still have the taste for battle, and a like-minded support team and a clean sheet of paper are great weapons to have in one’s arsenal, especially when markets are looking a little toppy.
