Changes to the PruSelect Fund Range

The fund's AA Rating was previously suspended following the departure of former manager Andrew Holliman. OBSR hold Mr Weldon in high regard, but his management style has typically been associated with a more focused portfolio, namely the AA Rated Threadneedle American Select fund. OBSR therefore believe an A Rating to be appropriate at the present time for this more diversified, benchmark-aware offering.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

Funds during this review were removed after either losing their rating or based on OBSR guidance.

The fund is offered as a core UK Equity fund and has typically displayed a growth bias. While acknowledging that the performance track record has been undermined by a very weak 2008, subsequently OBSR has noted that stock selection has been somewhat weaker than OBSR would have anticipated and the fund's return profile over recent years when compared to both the index and peers has been disappointing. As a result our conviction in the fund has moderated and OBSR believe that an AA Rating is more appropriate.
OBSR is aware of the appointment of Nick Little as co-manager of this fund but this has had no bearing on this Ratings decision.

The fund's A Rating was suspended in July 2010 following the departure of the manager, Peter Allwright. OBSR believe it is too early to build conviction in the fund at this stage given the changes in the team, but OBSR will continue to monitor it going forward.

The fund provides broad exposure to emerging market equities with a bias towards growth stocks that have the potential to deliver earnings surprises. While its risk profile is consistent with this, its performance relative to both the index and peers has been disappointing over the past three years. Furthermore, there have been team changes and this has impacted upon the Asian component of the portfolio. As a result, OBSR's conviction in the fund has moderated and OBSR believe that an A Rating is more appropriate.

The fund has failed to deliver to its performance objective for an extended period of time and while OBSR acknowledge that the long-term track record remains reasonable, the persistence of underperformance in recent years through a variety of market conditions has undermined OBSR's conviction to the extent that OBSR believe the fund no longer merits inclusion in our PruSelect Fund Range.

Whilst acknowledging that it has been a difficult period for fundamentally-driven bottom-up investors, the scale of the fund’s underperformance has caused OBSR’s conviction to wane. Consequently OBSR believe the fund no longer merits inclusion in the Service.

The fund's management will be passed to Cormac Weldon as lead manager, supported by Stephen Moore as deputy. Mr Holliman will be joining Polar Capital Management.

Mr Weldon is also the manager of Threadneedle American Select, which has an OBSR AA Rating and we will meet with him as soon as possible to discuss his plans for the Threadneedle American fund.

The fund's management will pass to Gemma Game, an established member of the team who is already the named portfolio manager of the Luxembourg-domiciled AXA WF Framlington Health fund. OBSR plan to meet Ms Game in the near future to discuss her future plans for the fund and for the healthcare team.

The fund previously held an OBSR AA Rating. OBSR have rated the Newton Income Fund under Mr Metcalfe's stewardship but due to the different nature of the mandate he is taking over, OBSR feel it is appropriate to remove the Newton Managed Fund's Rating and will meet with the manager in due course.

The fund previously held an AA Rating. The fund is managed from London by the Global Emerging Markets team headed by Devan Kaloo, under the guidance of experienced investor Hugh Young. Hugh Young is one of the early proponents of Asian equity investing and has built up a very robust process and well-resourced team around him. Their search for quality companies with attractive valuations stops them from chasing momentum and keeps turnover in the fund low. OBSR like the long term approach and appreciate that during rallies the fund may lag however on the downside, and over the long run, the fund tends to outperform. OBSR therefore see this as a very solid holding for long term investors in this region and have awarded the fund with its highest rating.