It looks like a cautionary tale for anyone planning to switch fund managers. Nedgroup Investments put up with deep-value manager RECM running its Managed Fund unsuccessfully for more than five years before moving it to Truffle, a much more pragmatic mainstream outfit, back in December. Yet over the past six months RECM Balanced, which is run in the same way RECM used to run the fund for Nedgroup, was top of the high equity multi-asset category, with a 14.5% return. The Nedgroup Managed Fund under Truffle’s stewardship was 148th out of 213, with a return of 4.9%.One of the reasons Nedgroup did not part company with RECM during its years of underperformance was that there was a good chance that deep-value shares would bounce back and it would then look silly — but unfortunately it switched just before the biggest rebound in value shares for decades. RECM chairman Piet Viljoen says that with hindsight his team made it easy for Nedgroup to sack it. It took too extreme a view too early.A...
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