AFI panellist and CFS managing director Darius McDermott says nine times out of ten, when a fund manager leaves a company, Chelsea usually puts the fund on hold, however he says on this occasion they have decided to leave it as a buy.
"The new managers are already members of a big established value team at Schroders and they have outperformed the income fund with the recovery fund, they are part of the same value team and effectively run similar funds," he says.
"For those reasons and the strong performance we have decided to leave the fund as a buy which is rare for us when managers leave."
Data from Financial Express supports the strong performance of Murphy and Kirrage. Over a one and three year period, not only have they outperformed their peer group but have also outperformed against both Purves and Lance over the same periods as the charts below show.
Performance of managers vs peer group over 1-yr
Source: Financial Express Analytics
Performance of managers vs peer group over 3-yrs
Source: Financial Express Analytics
Trustnet Alpha Manager, Nick Purves who has managed the Schroder Income fund since 1 October 2003 and Ian Lance who has managed the fund since 1 May 2007 have both outperformed their peer groups over a one, three and five year period.
The fund has also outperformed the IMA UK Equity Income sector, in which it sits, over a one, three and five year period returning 27.91 per cent, a loss of 0.56 per cent and a positive 44.23 per cent respectively.
This is compared to the IMA UK Equity Income sector which returned 23.54 per cent over one year, a loss of 17.89 per cent over three years and a positive 21.20 per cent over five years.
Meanwhile the Schroder Recovery fund has also outperformed its sector, the IMA UK All Companies, over one, three and five years returning 34.43 per cent, 2.58 per cent and 56.72 per cent respectively. This is compared to the sector which returned 25.88 per cent, a loss of 15.07 per cent and 27.93 per cent respectively.
Following the news of Purves and Lance's departure, OBSR suspended the funds AA rating, a typical event following manager changes to a fund. However, in this case the consensus among AFI panellists is for investors not to worry.
Tim Cockerill, head of research at Rowan, says when you look at a fund, its performance and how well it does, it is always difficult to know how much of this is down to the individual manager, and how much is a result of the process or result of the team.
"There are some funds out there that are very much run by the manager, in the case of the Schroder fund you have a big institution behind, you have a lot of analysts so it is one of the harder ones to decipher," he says.
However, he says the facts that Murphy and Kirrage are UK managers, value orientated like Purve and Lance and part of the Schroders culture already means there is no urgency for investors to get out of the fund.
Robin Stoakley, managing director, Schroders' UK intermediary business says the performance of Murphy and Kirrage speaks for itself and believes they can add value to the fund.
"There are a number of reasons why Kevin and Nick were the right people to take over the fund. First of all they have worked very closely with Nick Purves and Ian Lance and share that common investment process and philosophy and Nick and Kevin are embedded in the UK Equity team."
"They have the same key value orientated investment process and approach and consequently if you look at the Income and Recovery portfolios there is a high degree of commonality. In fact, 80 per cent of the stocks that are held in the Income fund are also held in the Recovery fund and about half the fund assets are the same."