Funds Centre

Rathbone Income Fund removed from Wealth 150

We have decided to remove the Rathbone Income Fund from the Wealth 150, our list of favourite funds in each sector.Recent performance has been disappointing and the fund has lagged behind its peers. It has been an extremely challenging market for

everybody, but our analysis indicates that the manager has not been adding value through stock selection. A relatively high exposure to smaller companies has also been a hindrance, since this area of the market is especially sensitive to the economy.The early months of 2009 have seen signs of encouragement and the fund manager has been working to reinvigorate the portfolio. However, its run of poor performance is concerning and we have decided to remove it from the Wealth 150 while we assess whether it remains worthy of a place on the list.Please note that this is not a suggestion that existing investors sell their holding in the Rathbone Income Fund; in our view investors should continue to hold. Carl Stick has an enviable long term record (the fund has been one of the top performers in the sector since he took over in 2000), however in the short term we feel the recent underperformance means that new money shouldn’t be committed to the fund until we assess its future prospects.We shall conduct additional research, including a meeting with the fund manager, and will keep a close watch on the fund’s performance (and manager’s stock selection) for signs of improvement or deterioration. The fund may be readmitted to the Wealth 150 in future, but we will inform investors if we believe they should take any action.Mark Dampier, Head of Research