Schroders is set to reopen Paul Marriage’s UK Dynamic Smaller Companies fund which has nearly halved in size since it was closed to new investment earlier this year.
The fund was ‘hard closed’ on January 22, meaning that no new units were created so neither existing nor new investors could buy into the fund.
Such a move is usually made by fund groups to protect the investment process, as if a fund becomes too big then the manager’s ability to run the fund effectively can be diminished, depending on the asset class.
But it will now reopen to new investment on October 20 after plummeting in size.
The fund size has plunged to £683m, according to data from FE Analytics, having peaked at more than £1.3bn at the end of January this year.
The fund has been particularly badly hit by the sell-off in small and medium-sized companies in 2014, in terms of both performance and outflows.
It is the second-worst performing fund in the IMA UK Smaller Companies sector in the past six months, losing 15.6 per cent compared to the sector average loss of 10.1 per cent, according to data from FE Analytics.
The fund’s long-term track record is strong though, with the fund in the top quartile in 10-, five- and three-year periods, according to data from FE Analytics.
Mr Marriage joined Schroders when it bought rival group Cazenove last year.
A Schroders spokesperson said the fund had been hard closed in January “in order to protect the returns following strong inflows throughout 2013”.
“We now feel there is sufficient available capacity to re-open the strategy.
“Over the long term the fund is consistently top decile (as at October 10) and we are confident that Paul Marriage and John Warren will continue to maintain their long term record.”
Speaking to Investment Adviser in July, Mr Marriage said mid and small caps had “fallen aggressively out of favour” and that smaller companies that had grown to be mid caps had been a particularly “painful area”.
The fund’s struggle has been exemplified by former top holding Xaar, a manufacturer of inkjet printheads.
The company’s share price peaked at 1,162p in December 2013 but a series of profit warnings has caused it to tumble to 244p.
