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Lyttleton warned again over fund perfomance
BlackRock’s Mark Lyttleton has been warned that time is running out to turn around his £1.2bn UK Absolute Alpha fund before investors withdraw from it.
The fund - which aims to deliver positive returns regardless of the state of underlying markets - was last week reporting a one-year loss of 7 per cent and three-year returns of just 3.4 per cent.
“There’s only so much investors can take in terms of patience,” said Hargreaves Lansdown senior analyst Meera Patel.
“I wouldn’t rule him out as a good fund manager over the longer term. I think he’ll do a decent job, but we are very disappointed about the performance last year.”
Hargreaves removed the UK Absolute Alpha fund from its ‘Wealth 150’ buy list last year. At the time Mr Lyttleton had delivered a positive 1.5 per cent return in the year to end of May, and he told Investment Adviser the situation was “frustrating”, but “not catastrophic or terminal”.
“I hope he doesn’t have another negative year,” added Ms Patel.
Darius McDermott, managing director at Chelsea Financial Services, warned that the firm would cut the UK Absolute Alpha fund from its recommended list if it does not improve within six months.
BlackRock admitted the firm was “disappointed” with the short-term results.
“Over the medium and longer term the fund has performed well for investors, returning 5.4 per cent per annum since launch in 2005 with a volatility level of 4.7 per cent versus the FTSE All Share volatility of 15.6 per cent,” said head of UK retail Tony Stenning.
