Each month RealAdviser asks a panel of fund selectors to give their verdict on a company's fund range. This month is the turn of F&C
Jason Britton, fund manager, T Bailey Asset Management
We like the F&C ethos and - with the merger with ISIS now well behind them - F&C is putting together a stronger proposition. We are keeping a close eye on Phil Doel and his ultra-focused F&C UK Opportunities Fund.
The Stewardship range under the leadership of Ted Scott and Hilary Aldridge stands out among the universe of ethical investment managers. However, it is the unconstrained F&C UK Growth and Income fund that we hold, also under Scott and Aldridge's guidance, but without the ethical restrictions. We moved into this fund as soon as they took over its management and readjusted the portfolio - our clients have been benefiting ever since.
However, in our view, there are still areas for F&C to work on - the image and branding needs greater clarity. The fund range needs some simplification and there should be an improvement in communication to advisers. With these areas improved then F&C should be set fair for an even more prosperous future.
Mark Dampier, Head of Research, Hargreaves Lansdown
It takes a good couple of years for mergers like the one between F&C and ISIS to come through and find their feet once again in the market. The group is in a transition period and going forward it needs a couple of killing applications to announce itself as a force in the market.
F&C Asset Management has also had to clear a lot of congestion in terms of managers, funds and policies that resulted from the mergers. The problem it faces is that the group has to challenge a load of strong competition within the market, which is not helped by 90% of new inflows going into about 3% of funds. It is now a case of being top decile rather than top quartile.
Currently the group does lack a strong flagship fund. However, with managers like Ted Scott and Phil Doel F&C has a chance of forging a couple of strong funds on the UK equity side. Installing Phil Doel as manager of the new UK Opportunities fund, and the addition of other former DWS managers will hopefully act as a catalyst to rejuvenate the group's UK equity proposition.
Ted Scott, meanwhile, has proven that he is a very capable manager with the ethical funds. Now as fund manager of the group's equity income fund, he has the free universe of funds to invest in without the ethical screening. I believe a group needs a strong equity income fund to be considered a major equity house.
Bambos Hambi, head of multi-manager, Gartmore
The biggest story around F&C has been the merger with ISIS, which was formerly Friends Ivory & Sime and Royal & Sun Alliance. The fallout of the merger saw a lot of people leave the new company.
The group is currently re-building; however they have made a huge step in the acquisition of the five-strong UK team from DWS. Phil Doel, Luke Newman and Makis Katesis are three of the team whom I know very well. The group will do well in the UK when you add the DWS appointments to the group's other managers such as Jamie Hooper and Ted Scott, who is well-known for his time running the Stewardship funds.
Outside the UK offering, we also like Mark Williams, who runs the group's Pacific fund and Robert Siddles, manager of the US Smaller Companies fund, which, despite a sticky time at the end of last year, has a good long-term investment record.
Darius McDermott, managing director, Chelsea Financial Services
F&C is a good company that has had a lot of turbulence post-merger. At the time I said that I wasn't bothered about the merger as long as they kept their key managers - James Foster, Davina Curling and Mike Felton. Well, Foster and Felton have gone. But the loss of Foster has not affected performance. Fatima Luis has done an excellent job and the bond team has proved very resilient.
Phil Doel's appointment on the UK equity side is a very positive move. He was on our buy list when he was at DWS and this new fund is likely to appear on it again. His new fund is like his former DWS fund - 25 equally weighted stocks, a conviction portfolio. He had good performance at DWS. They now have a good range of UK funds across the risk spectrum and Doel's appointment is likely to produce better performance across the UK equity range.
Ethical funds have generally underperformed, but the Stewardship Income fund has been a very good fund. Now Ted Scott is taking over the Income & Growth fund, and I know which one I would buy. I do not believe in adding constraints.
John Husselbee, chief executive of North Investment Partners
F&C is not alone in the City in having a lot of funds, clients and legacy issues. Some of its mandates are a little long in the tooth. They are generally quite benchmark-aware and to change them around is very difficult. Now it is all about alpha. The group was very wise in bringing in Phil Doel and his team. It has got some real super-tankers and these will not be turned round quickly. F&C has to be careful that they keep turning in the same direction. But to help, the group has launched some speed-boats. These will be more dynamic and nimble. Doel's team has credibility in the dynamic space from the DWS UK Opportunities fund, which was a strong performer. The challenge with speedboats is that if you have too many people on board, they sink. So F&C will have to be careful not to overload them with assests.
On the investment trust side, it has similar problems. It will be interesting to see who the board of the F&C Latin American trust appoint to manage the fund going forward. Generally, it seems to be in capital protection rather than growth mode on the investment trust side. They are big funds with long-standing mandates and you cannot just rip things up and start again.
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