Hargreaves Lansdown has dropped the £2.1bn M&G Recovery fund from its Wealth 50 buylist following a period of poor performance.
The M&G Recovery fund is run by Tom Dobell and was once a strong performer but in recent years the performance has been weak.
The fund has returned 20 per cent over the past five years, compared with 47 per cent for the average fund in the IA UK All Companies sector in the same time period.
Since 2000, when Mr Dobell took charge of the fund, it has marginally outperformed the IA UK All Companies sector, returning 168 per cent, compared with 162 per cent for the sector.
Darius McDermott, managing director at Chelsea Financial Services, said: ”The performance of the fund has been a real tale of two halves.
"For about the first 10 years with Tom Dobell in charge, the fund beat the index for nine of those years, and that takes some doing.
"We had the fund on our buylist for a long-time, but not for four or five years now. It started to underperform quite a lot, I think, as frequently happens with funds that have performed well, it probably got too big.
"The underperformance then gets very hard to turn around. It's not a fund we have looked at for a while.”
The fund has been on the Hargreaves Lansdown buylist since 2007.
Explaining the decision to remove it now Dominic Rowles, analyst at the company, said: “Even the best fund managers go through poor periods, and we're usually happy to support them through weaker periods, providing we retain conviction in their ability to perform well over the long run.
"But we've started to doubt Tom Dobell's ability to outperform.
"In short periods where unloved, value-style companies returned to favour, the fund didn’t do quite as well as we'd have expected, meaning our patience went unrewarded."
He said while other funds with a similar approach had seen their performance boosted since September, the M&G fund appeared to be missing out.
He also criticised the manager's increased exposure to early-stage businesses, arguing they tended to take up too much of a manager's time and were also often more difficult to buy and sell than their larger counterparts.
"Overall, we feel there are lots of talented fund managers in the UK All-Companies sector and we currently have more conviction in others to deliver stronger performance over the long run," he said.
Jason Hollands, managing director for business development and communications at Tilney, said: “The value style of investing has been out of favour for some time, and that has hurt the performance of this fund."
M&G has been approached for comment.
david.thorpe@ft.com
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