A number of high-profile managers have moved between fund houses recently. Richard Buxton left the Schroder UK Alpha Plus fund in March, and Anthony Nutt retired from his Jupiter portfolios in December last year. However Hollands, managing director of business development and communications at Bestinvest, says that due to these recent changes and future manager moves, investors should not get caught simply trawling for the cheapest deals on fund platforms.
"There has been a lot written about DIY investing of late, much of which seems to suggest the prime objective should be to find the cheapest platform, weirdly, as if access to quality research on asset allocation, fund selection and robust portfolio monitoring has zero value," he said.
"In fact life isn’t as simple as finding the fund which tops the tables and transacting as cheaply as possible."
"A fund purchase is only the start of your journey, not the conclusion of some pre-investment homework."
"Active fund management is a people business and while there are some products managed with a genuine 'team' approach, in most cases performance is ultimately down to the skill of a key trigger-puller."
"Yet, as we have been reminded in recent months – think Tony Nutt, Mark Lyttleton, Richard Buxton, Errol Francis, James Clunie, Philip Matthews and Alex Breese – fund managers change jobs and retire from time to time."
"And when this happens, you need to know about it and you need to reassess the case for sticking with a fund," he added.
"I would go as far as to say you simply shouldn’t invest in active funds unless you are prepared and equipped to scrutinise individual track records and to proactively stay on top of moves."
Hollands says it can be difficult to analyse career performance, as managers don’t normally stay in charge of one fund for such a long period of time.
"Now when people invest in funds, they are encouraged to do so on a long-term basis. Yet typically performance is supplied on factsheets for around five years."
"Not only is that barely a cycle, the reality is also that on average, funds change managers approximately every four years, so the numbers you are looking at may not be particularly useful at all."
"Research in the public domain is also virtually entirely at the fund rather than manager level, so has limitations."
"Many stars turned out to be shooting stars, who simply got lucky over a short period during which they were hailed as geniuses and sucked up assets," he added.
FE Trustnet has a comprehensive fund manager research centre, including factsheets for more than 1,600 managers, and ratings for the top 10 per cent of managers overall.
Click here to see it.
However Whitechurch’s Ben Willis (pictured) says investors should not always focus on manager track records as some funds will perform in a similar way despite a change at the helm.
"If a fund is quite investment-process led, then a change in management won’t necessarily mean a lot," he said.
"Investec UK Smaller Companies is a good example. The fund used to be run by Daniel Hanbury before Philip Rodrigs took over."
"That fund is very investment-process led but of course you would hope to add 25 per cent via his stock selection."
"But when a process is so intensive and rigid, the stock selection is one of the only ways the manager can add value."
FE Alpha Manager Philip Rodrigs has managed the five crown-rated, £483.2m Investec UK Smaller Companies fund since June 2006.
According to FE Analytics, it is the fourth best-performing IMA UK Smaller Companies fund over this time, with returns of 114.49 per cent, more than doubling those of the sector and its benchmark – the FTSE Small Cap index.
Performance of fund vs sector and index since June 2006
Source: FE Analytics
Investec UK Smaller Companies has an ongoing charges figure (OCF) of 1.6 per cent and requires a minimum investment of £1,000.
Despite the example of Investec UK Smaller Companies, Willis says that there are certainly examples were investors are buying the name of the manager, not the fund they run.
"Schroders has brought in Phillip Mathews and Alex Breese to take over Buxton’s UK Alpha Plus fund."
"However, when investors were buying that fund they were getting Richard Buxton. They were getting a high conviction, quite cyclical UK equity fund," he said.
"Now they could be getting something completely different, so they may follow him to Old Mutual."
"Another example would be if Neil Woodford were to leave, because you aren’t buying his funds, you are buying Neil Woodford."
"I’m not saying he is going to leave, but there is definitely a star manager mentality out there," he added.