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Henderson wins McLean's SVM Global - but do manager changes work?
Markets
by Sarah Miloudi on Feb 07, 2013 at 13:03
The downside, however, is that a change is not always enough to guarantee an uplift in shares - where investors eventually gain their return when they decide to exit a vehicle.
Brown explained: 'The potential for a new manager to produce a recovery in performance means it is still one of the key benefits of the investment trust structure.
'However based on our limited sample, we can see the appointment of a manager who is able to produce a recovery in performance does not necessarily guarantee a re-rating in the shares.'
Writing in his review of the investment trust sector over 2012, Brown crunched the numbers on six investment trusts where the managers had switched and pointed to BlackRock's Income & Growth as an example where a fund had undergone a manager change but marginally underperformed its benchmark.
Moreover, a change in manager often results in a rise in fees. A stand-example would be Neil Woodford coming on board at Edinburgh Investment Trust leading to a rise from 26bps of total assets to 60bps of market capitalisation, with a performance fee on top.
But speaking about their appointment to SVM, Barrass said he and Craig are confident in the trust's future, and perhaps reassuringly, the board of another Henderson trust, Bankers, only last month unveiled a reduction in fees to investors.
Barrass said: 'Paul and I are delighted to have this opportunity to manage SVM Global and will work hard to deliver improved performance for both the trust’s board and its shareholders.
'We are confident the trust has an exciting future and we shall be looking to grow the trust over time.'
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by Sarah Miloudi on May 21, 2013 at 09:59
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