Investec Wealth's Summers: Industry still lacks active UK large-cap funds

Fund groups should focus more attention on the need for active UK equity funds that are overweight large caps, according to Andrew Summers, head of fund research at Investec Wealth & Investment.

The typical UK equity fund had between 50% and 60% in UK large caps last year, according to Morningstar, with the rest lower down the cap scale. That made for a difficult 2014 for most as the relative underperformance of small-caps caught them out. The FTSE Small Cap (ex-ITs) index closed down 3.8% last year, compared with a 0.7% rise for the FTSE 100, and many of the mid-cap success stories of 2013 also suffered. The blue-chip index has also outperformed both small and mid caps year to date. Summers’ desire for more funds with large-cap overweights comes from a desire for more flexib...