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News release 5 December 2005

SO BIGGER IS BETTER? NOT IN FUND MANAGEMENT IT’S NOT!

Moneyspider Rating® shows boutique managers often offer better performance than larger rivals

Big is not necessarily better, particularly when it comes to the selection of top-performing investment funds. That is the key finding of new research from online fund information and ratings service, Moneyspider.com. More of the funds marketed by ‘boutique’ investment houses received a Moneyspider.com A or B rating than did their larger, better known counterparts.

Between 71% and 83% of the funds offered by boutique fund managers such as Margetts, Rathbone, Marlborough and Neptune are rated A or B. At 83.3%, Birmingham-based Margetts has the highest percentage of funds with a Moneyspider.com A or B rating.

The same comparison of the performance of the funds offered by the large investment houses revealed that between only 27% and 36% of funds offered to retail investors by Gartmore, Henderson, Legal & General and Prudential are rated A or B (see table below). At 27%, Gartmore had the least A or B rated funds.

The Moneyspider.com Rating® is a proprietary algorithm, developed in conjunction with Dr Tim Mortimer of Future Value Consultants. It uses 34 separate calculations to assess the performance of funds against four main parameters, each analysed over 1, 3 and 5 years. The calculations are then converted into an easy to understand score from A (highly rated) to E (very poorly rated). (See below for ‘science’ behind the Ratings).

Bill Ross, Managing Director, Moneyspider.com said:

“The notion that big is best is certainly not true in fund management. Over the last five years, the UK market has seen a rise in popularity for boutique investment houses, and, given their track record of consistent positive performance, it’s hardly surprising.

“However, the disappointing reality for most investors is that neither they, nor in some cases their financial advisers, would have heard of these relatively unknown smaller investment houses, and are therefore missing out on great investment opportunities.

“There are many ways to classify a boutique, but generally speaking, boutique fund managers are independently-owned or employee-owned, and relatively small in size. They often invest in specialist areas of expertise, rather than attempt to be all things to all men and run funds across each and every sector.

“Investors should monitor their investments more closely and ensure that they have the tools to hand to spot strong investment opportunities that would otherwise pass them by.

“In investment terms familiarity doesn’t always necessarily breed content.”

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