The loss of Buxton (pictured) came as a blow to Schroders but Philip Matthews is a strong heir to his throne, according to Bestinvest’s Jason Hollands, with a track record comparable to that of his illustrious predecessor. "We suspended our 'buy' rating on the Schroders fund when we found out about Richard’s departure, but in the immediate term we don’t think there’s any cause to take action, for two reasons. Firstly we rate Sue Noffke, who is looking after the fund in the short-term, very highly, and secondly we think Philip Matthews is a good hire."
"He has a good set of numbers, arguably as good as Richard’s, so the argument for jumping ship is a tough one. It’s a big coup for Old Mutual to get him, but investors don’t need to do anything straight away – there’s a great manager coming in and we want to see how he settles in at Old Mutual."
Matthews took over at Jupiter Growth & Income in June 2001. Over 10 years, he has returned 167.96 per cent, compared with 199.09 per cent from Buxton. Over five years, however, the tables have been turned, perhaps as a result of the managers’ very different styles.
Performance of funds, sector and index over 10yrs
Source: FE Analytics
According to data from FE Analytics, the Jupiter fund has a considerably lower beta over three years, and a significantly higher alpha, which combined with a lower volatility argues the case for a more steady performance from Matthews.
Ratios of funds over 3yrs
| Name | Alpha | Beta | Volatility |
|---|---|---|---|
| Jupiter Growth & Income | 5.19 | 0.82 | 14.57 |
| Schroder UK Alpha Plus | 1.56 | 1.04 | 18.24 |
Source: FE Analytics
The two fund managers have different merits. If anything, Hollands says, the real issue will be whether to give Old Mutual’s UK Alpha fund a buy-rating as well as – not instead of – the Schroders fund.
Other advisers take a similarly cool approach.
"We wouldn’t follow him slavishly just because he’s a big name," said Andy Merricks, head of investments at Skerrit Consultants.
"We weren’t using him at Schroders because we felt that the fund had got a little bit too big, but with a small fund – he’s got about £150m under management at Old Mutual – he’d be on the shortlist if we were looking at picking up a UK All Companies fund."
Buxton faces tough competition in this sector, however, says Merricks.
"He’s had good times and bad times, and this is a crowded sector – there are a lot of other managers in there who deserve a look."
Buxton favours a tightly held, high-conviction approach, and tends to perform best when markets are on a positive footing.
Merricks commented: "If you like volatility, then Ed Legget, who runs Standard Life UK Equity Unconstrained, is one to look for – when markets do well it does really well. JOHCM UK Dynamic, managed by Alex Savvides, is another one that we’d have on the same shortlist."
Ben Willis, head of investment research at Whitechurch Securities, rates Buxton as a manager, but prefers Cazenove’s Julie Dean, who is set to join Schroders later this year.
"We rate Buxton highly if you’re looking for that style of investment, especially if you’ve got a view that markets are going to rise strongly. He’s a good man to have in your portfolio at that point," he said.
"At the moment, we don’t have any exposure to him in our portfolios. We’ve been holding Julie Dean, who has a very different approach."
Dean, who manages the Cazenove UK Opportunities fund, has returned 209.91 per cent over the last decade, according to data from FE Analytics, outperforming her peer group composite by a margin of 100 percentage points, and beating Richard Buxton’s return over the same period.
Performance of managers over 10yrs
Source: FE Analytics
Willis thinks her style works well in more volatile markets, and during periods when upward momentum is thin on the ground.
"She is not beholden to a small number of holdings – she has at least double what he’s got – and she pursues a business cycle rather than a sector-based approach."
"Added together, this means she can probably offer a bit more protection in down markets, but still deliver when things are positive."
All three funds are available for a minimum investment of £1,000.
