Ryan Hughes, head of active portfolios at AJ Bell, comments:
“News that Tom Dobell has stepped down from running the M&G Recovery fund, the UK’s oldest unit trust, and hand responsibility to Michael Stiasny after 20 years will come as important news to the many investors who have stuck with the fund despite its poor performance over a number of years. Tom delivered some fantastic performance for investors when his value style was in favour and the fund grew to be one of the largest UK equity funds at the time. However, as investors moved away from value and towards growth, performance really struggled, a fact perfectly illustrated by the performance chart which shows performance relative to the FTSE All Share during his tenure. Dobell admitted himself that the fund became too large and had too many stocks in a rare moment of contrition from a fund manager.
“Looking ahead, investors in the £1.4bn fund will need to consider carefully whether to stick with the fund under the new manager. While the investment style isn’t likely to change, there looks to be an increased focus on medium sized companies which is likely to result in some turnover in the portfolio while the new manager repositions it. For those that still want a value style, Fidelity Special Situations and Man Undervalued Assets both make for strong alternatives.”