Lonsec unsure about UBS small caps team
The UBS small caps fund might have lost its competitive edge with the departure of its previous managers John Campbell and Jeremy Bendeich, according to a report published by Lonsec.
In its small cap sector review, the researcher has announced a downgrade from a 'fund watch' to an 'on hold' rating for the UBS Australian Small Companies Fund.
"Lonsec considers the fund's major competitive edge to be its disciplined and robust investment process," Lonsec's investment analyst Steven Sweeney stated.
"However, the investment team has experienced persistent year-to-year personnel change in recent years and is untested as a combined entity, with Victor Gomes only joining Stephen Wood in mid 2011," Sweeney said.
The fund's previous managers Jeremy Bandeich and John Campbell made a sudden departure from the company in April 2011, announcing the launch of their own small cap boutique - Avoca Investment Management.
The only remaining member of the previous three-person team, Stephen Wood, almost immediately took over, with Victor Gomes having been appointed to co-manage the fund in late April.
However, the UBS acquisition of ING Investment Management further added to the instability, according to Lonsec.
"While perhaps impacting less on the small caps team than it has on the large cap team, this still has the potential to add further instability," the report stated.
Lonsec acknowledges that the move by UBS to "boutique" the equity teams, while still early days, may assist in addressing this issue and enhance the managers' alignment of interest with investors.
Furthermore, the recent hire of a resources analyst to this small caps team could prove beneficial in providing insight into a key small cap sector, Sweeney said.
However, Lonsec concluded by saying it currently believed "there are a number of more attractive opportunities in the small cap sector" and that it will be looking for a period of stability and cohesion in the new structure.
Recommended for you
Financial advisers will have to pay around $10.4 million of the impending $47.3 million CSLR special levy but Treasury has expanded the remit to also include super fund trustees and other retail-facing sub-sectors.
Recommendations by the FSC around implementing a practicing certificate framework for advisers would be burdensome and add little value for AFSLs, according to SIAA.
The RBA has made its latest interest rate decision at the the final monetary policy meeting of 2025.
AZ NGA has acquired Sydney-based advice and wealth management firm Financial Decisions, allowing its CEO to step back and focus on providing advice.
