Defaqto to penalise 'too big for sector' funds on performance concerns

Fund concentration in the UK has significantly increased in recent years, with multi-asset absolute return giant Standard Life Investments' Global Absolute Return Strategies (GARS) sitting at £26bn and M&G's Optimal Income fund surpassing £15bn, for example.  However, Defaqto has become concerned size may hinder a manager's ability to continue performing strongly in some cases, as a larger volume of assets can reduce their ability to move nimbly between trades. Frank Potaczek (pictured), senior vice president of funds at Defaqto, said: "Most people would disregard a fund if it was...