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Standard & Poor’s (S&P) has assigned a ‘sell’ rating to the AMP Capital Small Companies Fund following the announcement that the fund’s portfolio manager Michael Hughes will resign in June.
S&P stated the fund was given the ‘sell’ rating due to the uncertainty that now surrounds the future of an Australian equity small cap strategy at AMP Capital Investors (AMPCI).
It stated that AMPCI has expressed its intention to focus its research efforts on managing large-cap equities, and that the transition arrangements for the AMP Capital Small Companies Fund have yet to be decided.
The fund was placed ‘on hold’ in November, 2009 following the resignation of fund co-manager Gary Armor.
The fund will now be managed by senior portfolio manager and capital team leader Greg Barnes, while dedicated small-cap analyst David Berton-Jones will transition to the large-cap team.
“Although Mr. Barnes has extensive fund management experience, given that AMPCI has not committed to replacing Mr. Hughes with a dedicated small-cap portfolio manager, S&P is concerned about its commitment to supporting the strategy,” said S&P analyst Justine Gorman.
S&P recommended that existing investors should consider obtaining financial advice on switching or redeeming their funds.
The ‘sell’ rating does not apply to the AMP Capital Equity Fund, which remains ‘on hold’.
