Morningstar downgrades Dobell’s Recovery fund

Morningstar downgrades Dobell’s Recovery fund

Morningstar has downgraded the struggling M&G Recovery fund from its highest rating of gold down two notches to bronze.

The ratings agency has said the extensive outflows seen from the fund recently could hurt performance, which is already poor relative to peers in recent years.

The fund, managed by Tom Dobell, has delivered a return of 20.2 per cent in the past five years, less than half of the peer group average return of 57.9 per cent.

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The size of the fund has shrunk from £8.1bn to £5.1bn in the past 3 years and Morningstar said because of the large illiquid positions in the fund the outflows could “could inhibit the manager’s ability to drive the fund to the same degree of success that investors had experienced in the earlier part of his tenure”.