Dean managed the five crown-rated Cazenove [now Schroder] UK Opportunities fund since December 2002 and was seen as the big-name replacement for Richard Buxton, who left Schroders last year to take the position of head of UK equities at Old Mutual.The manager has left her post with immediate effect, according to a statement from Schroders, with Matt Hudson taking over control of the Schroder UK Opportunities fund.
Schroders said that the investment strategy the fund uses – "a business cycle approach" – will remain unchanged.
The strategy combines a macro view with stockpicking, while alternating risk depending on the stage of the business cycle the team believes the economy is at.
While Schroder UK Opportunities' specific style makes it hard to compare to other funds, here we look at three potential alternatives.
Miton UK Value Opportunities
Ben Willis, head of research at Whitechurch, told FE Trustnet earlier this morning that he had sold out of Dean’s fund following her departure and has not found an immediate alternative yet.
However, one option he will consider is the Miton UK Value Opportunities fund, which is headed up by George Godber.
Willis says it is starting to gain a lot of traction as it approaches £100m of assets under management.
The £96.4m fund was launched in March 2013. It is the third best performing portfolio in the IMA UK All Companies sector over that time with returns of 29.75 per cent. The FTSE All Share gained 14.45 per cent over the same period.
Performance of fund, sector and index since Mar 2013
Source: FE Analytics
Godber and his co-manager Georgina Hamilton have a deep value style which has helped the fund to maintain strong performance so far in 2014, with returns of 8.45 per cent. This is more than double the gain of the FTSE All Share and four times more than the sector average over this period.
Top positions in the fund currently include housebuilders Redrow and Galliford Try and car dealers Vertu Motors.
Godber was formerly at Matterley alongside FE Alpha Manager Henry Dixon, who now works at GLG.
Like Willis, Philippa Gee of Philippa Gee Wealth Management says that investors are unlikely to find another manager who runs their portfolio in the exact same way as Dean, but that investors could turn to Miton UK Value Opportunities as Godber and Hamilton have a very flexible approach.
“I think it is a very interesting fund,” Gee said. “They take a multi-cap approach, it is a very keen team and they have a short but very strong track record on the fund.”
The fund has an ongoing charges figure [OCF] of 1.12 per cent.
Old Mutual UK Alpha
Willis says Old Mutual’s Richard Buxton and Investec’s Alastair Mundy should also be considered by investors looking to sell out of Dean’s former fund.
“You can’t ignore managers such as Buxton and Mundy, but they are always going to be in the mix to some extent,” he said.
Buxton has run the £1.5bn Old Mutual UK Alpha fund since December 2009, but moved over to Old Mutual last year following his departure from Schroders.
Since the manager has been running the fund it has returned 83.11 per cent compared with a sector average of 65.7 per cent and a gain in the FTSE All Share of 59.1 per cent.
Performance of fund, sector and index since Dec 2009
Source: FE Analytics
The fund was top-quartile in 2010, 2012 and 2013. This year, despite a relative outperformance of large caps – which Buxton favours – the fund has dropped to the third quartile with returns of 1.39 per cent compared with the sector’s returns of 1.91 per cent.
Both Dean and Buxton have outperformed the wider UK equity market over the past decade.
However, Dean has made on average 20 percentage points more than Buxton.
Performance of managers over 10yrs
Source: FE Analytics
Buxton has always typically held at least 80 per cent of his portfolio in large caps, while Dean kept a high weighting to mid caps at times during her tenure as manager of the fund.
As a recent FE Trustnet article highlighted, the managers have a different approach to running money as well.
The Old Mutual fund has an OCF of 0.78 per cent.
Investec UK Special Situations
Alastair Mundy has been at the helm of this £1.34bn fund since August 2002, over which time it has returned 231.35 per cent, making it a top quartile performer in the IMA UK All Companies sector.
Its FTSE All Share benchmark has returned 184.24 per cent.
Performance of fund, sector and benchmark since Aug 2002
Source: FE Analytics
While not a like-for-like alternative to Dean, Mundy is another of the highest profile managers in the UK growth space.
He has a reputation as one of the UK’s best contrarian investors and currently has a tilt towards mega cap names such as Royal Dutch Shell, BP, Unilever and Grafton.
According to Square Mile Research, the manager has a consistent investment style that emphasises both value and downside protection, although this sometimes leads to periods of underperformance relative to the fund's benchmark.
“Given the contrarian philosophy and long-term focus of the fund, investors should be aware that there may be times when its performance deviates substantially from the benchmark, particularly over short to medium time frames,” Square Mile said.
The fund has outperformed the FTSE All Share in seven of the past 10 full calendar years, falling short in 2010, 2007 and 2005, which saw it placed in the bottom quartile.
The fund has an OCF of 0.84 per cent.
