Julie Dean’s Cazenove UK Opportunities fund is approaching capacity, according to head of investment funds at the firm Robin Minter-Kemp, who is looking to deter future inflows in to the five-crown rated portfolio. Dean (pictured) is one of the best performing growth managers of recent years, leading her Cazenove UK Opportunities fund to the top decile of its IMA UK All Companies sector over a one, three, five and 10 year period.
The fund is also one of the most consistent, beating its sector average and FTSE All Share benchmark in each of the last five calendar years.
Performance of fund versus sector and index over 5yrs
Source: FE Analytics
The manager, who uses a business cycle approach to investing, has manoeuvred her portfolio through up and down markets very successfully since the financial crisis.
Her style means that she has a higher turnover than the vast majority of her rivals, which Minter-Kemp says is one of the key reasons why Cazenove has moved to stem further inflows.
“Julie Dean has indicated that as assets run on her model – Cazenove UK Opportunities and Cazenove UK Equity – are now approaching £2.5bn, in the interest of maintaining the flexibility to generate performance for fund holders, she would prefer to deter future inflows,” said Minter-Kemp.
“We monitor capacity within all our funds to ensure inflows do not impede future investment returns in relation to fund objectives and market liquidity.”
FE Alpha Manager David Coombs highlighted the dangers of allowing funds to get too big in a recent interview with FE Trustnet.
Year-on-year performance of fund versus sector and index 2008-2012
| Name | 2012 (%) | 2011 (%) | 2010 (%) | 2009 (%) | 2008 (%) |
|---|---|---|---|---|---|
| Cazenove UK Opportunities | 33.3 | 1.3 | 20.09 | 34.49 | -23.29 |
| IMA UK All Companies | 15.05 | -7.04 | 17.53 | 30.4 | -31.96 |
| FTSE All Share | 12.3 | -3.46 | 14.51 | 30.12 | -29.93 |
Source: FE Analytics
Minter-Kemp (pictured) says that the fund will remain open to investors via certain platforms, but that he has no hesitation to remove them from the likes of Hargreaves Lansdown and Bestinvest if assets continue to grow.
The fund’s minimum investment and charging structure will also stay the same.
“This is a pre-emptive move,” he said. “We want to make she has the maximum flexibility to maintain her excellent performance.”
“Cazenove UK Opportunities and the Dublin-domiciled Cazenove UK Equity fund will remain open and available on current platforms for the time being."
“Accordingly we will not be actively pursuing new assets for the fund and will discourage new inflows from discretionary managers with immediate effect.”
The Cazenove UK Opportunities fund has been one of the best selling funds in the entire IMA unit trust and OEIC universe in recent years. It has grown from £350m to £1.61bn in the last year alone. Dean’s stellar performance saw her achieve FE Alpha Manager status in the latest rebalancing.
The manager is currently increasing her exposure to cyclicals during weakness, such as manufacturers and financials. She explained how she is positioning her fund in an exclusive interview with FE Trustnet earlier this week.
Cazenove UK Opportunities has a minimum investment of £1,000 and has an ongoing charges fee (OCF) of 1.58 per cent.
Hargreaves Lansdown's Richard Troue says he's disappointed that the fund could be soon unavailable to new investors, but understands Cazenove's decision.
"Of course it's a shame that we could lose yet another quality fund, but it's good to see Cazenove being pre-emptive," he said.
"Existing investors will be no doubt pleased that they are taking steps to protect them."
If you have any questions about the fund, don’t hesitate to leave a comment below, or email us at editorial@financialexpress.net.