Bill Hench, manager of the Legg Mason Royce US Small Cap Opportunity fund, has blamed an underweight in biotech stocks and his value-oriented investment style for this year's underperformance.
The $700m (£454m) fund is down 4.1% over the year to 2 November, according to FE Trustnet, versus the IA North American Smaller Companies sector average return of 3.8%. Hench (pictured) said the fund's significant underweight in biotech stocks is one of the key reasons it is trailing its peer group, despite the sector's recent sell-off. Healthcare is one of the biggest underweights in the portfolio, with a 5.5% allocation to the sector versus a 15.4% weighting in its Russell 2000 benchmark. The manager said "the world fell in love with biotech" this year, and his fund has suffered ...
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