While pointing out not only that the sector has a strong track record of long-serving fund managers, but also that there have been some retirements in the period covered, the AIC did say that it is a rather high number.
Indeed, if one looks back at the last three discrete years, the numbers are fairly revealing. In 2012, only 6% of the sector reported a change of manager, while in 2013, that number rose to 9%. For the calendar year 2014, 13% of companies got a new manager and if the first six months of 2015 are included, the figure rises to 18%.
Asked if this trend was expected to continue, AIC CEO, Ian Sayers, told Portfolio Adviser that there is an element of co-incidence in the number because of the retirements on the list, that makes the future impossible predict.
But, he added, least in part, the growth in manager change does reflect the fact that independent boards are addressing long-term performance issues.”
While performance has always been a key issue that boards focus in on, he said, he agreed that the rise of low cost passives and the current market conditions more generally had exacerbated that focus.
“Cost is a bigger issue than ever before, investors are increasingly aware of what they are paying for,” he said. And, while he pointed out that the use of passive investments was fairly rare within the investment trust space, the focus on costs and the availability of alternatives has focused the minds of investment company boards very closely on what the manager is doing.
“Managers have to outperform their benchmark or do something different, offer something that investors can’t get elsewhere if they are to continue to selected,” he said.
