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9th July 2019
WEALTH MANAGER

The red flags signalling a fund manager may have lost it

Are fund managers too big to fail? No. If they fall below market expectations, they shrink through natural sales.

In Neil Woodford's case, that process of re-balance was complicated by technical issues around liquidity and fund rules. It was not expected, but it was always a possibility. TAM is a funds of fund manager, and its job is to sort 'the wheat from the chaff'. Avoiding the sink holes is essential; spotting them early is key.

The strategy and approach a fund manager takes must be tempered with how it is being implemented. How big (or small) they are, what they invest in and underlying liquidity are essential components for review. The present situation merely sheds light on a name – that is the unimportant huff and puff in the market – it is the digging beneath the hood that tells us if the product is right or wrong for clients.

Being too big is not good or bad – it is part of the natural review process.

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