Mark Lyttleton, manager of BlackRock UK Absolute Alpha (GB00B06L9G55) and BlackRock UK Dynamic (GB0000709062) is to relinquish management of the funds and leave the firm at the end of April after transitioning his responsibilities to new managers.
After BlackRock UK Absolute Alpha launched in 2005, Mr Lyttleton initially had a good run, however more recently the fund has underperformed the average absolute-return fund over one, three and five years with negative returns, putting it among the bottom quarter of performers in this sector. This is in contrast to its objective of delivering a positive absolute return in all market conditions.
Absolute-return funds are hedge-fund-style products available to private investors, but many have disappointed by failing to protect downside, although some have delivered, such as this week's fund tip SWIP UK Flexible Strategy (GB00B1265J60) or IC Top 100 Fund Newton Real Return (GB0001642635).
BlackRock UK Dynamic, meanwhile, has underperformed its benchmark, the FTSE All Share, over one, three and five years, as well as the average UK All Companies fund, putting it among the bottom quarter of performers in this sector.
The BlackRock UK Dynamic Fund will be merged into the BlackRock UK Fund, subject to Financial Services Authority (FSA) and unit holder approval. BlackRock UK Dynamic investors will have the option of switching into any other of the BlackRock UK Retail range of funds, and the preliminary charge on the switch will be waived.
From 28 March 2013, Nigel Ridge, currently lead portfolio manager of BlackRock's UK Equity Hedge Fund, will be appointed co-manager of the BlackRock UK Absolute Alpha fund alongside Nick Osborne, who has co-managed that fund since January 2008.
Mr Ridge has run BlackRock's UK Equity Hedge Fund since launch in 2005, after joining BlackRock in 2004. He has 25 years' experience of managing UK equities.
"Mr Ridge has a good track record on BlackRock's UK Equity Hedge fund, which has returned positive numbers each year since 2005," says Darius McDermott, managing director at discount broker Chelsea Financial Services.
Meanwhile Nick Little, who has been lead manager on the BlackRock UK Fund since March last year, will assume management of the BlackRock UK Dynamic fund. He has worked at BlackRock for 12 years.
| 1-year cumulative total return (%) | 3-year cumulative total return (%) | 5-year cumulative total return (%) | Total expense ratio (%) | |
| BlackRock UK Absolute Alpha A Acc | -3.70 | -7.13 | -0.67 | 1.93 |
| BlackRock UK Dynamic A Acc | 5.52 | 8.44 | 8.01 | 1.67 |
| FTSE AllSh TR GBP | 14.83 | 27.16 | 38.7 |
Source: Morningstar as at 25 March 2013
