Earlier this week Morningstar downgraded Mr Barnett’s funds to a neutral rating, down from bronze, and specifically cited the fund’s liquidity profile which its analysts said had become “less attractive” following more investment in early stage, less proven companies.
The Morningstar announcement stated: “While the group has been able to meet redemptions so far, Mr Barnett's continued intent on investing in smaller names gives us cause for concern.
“While contrarian investing often involves an element of risk, the nature of some of the issues, including among small caps and micro-caps, has raised concerns over Barnett's implementation of the approach.”
Adrian Lowcock, head of personal investment at Willis Owen, thought the move from Morningstar was an “overly cautious” reaction following the fact the industry was slow to respond to the Woodford situation.
He said: “There’s an element that you have to look more closely at liquidity stuff now to manage that risk effectively.”
imogen.tew@ft.com / david.thorpe@ft.com
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