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Hargreaves Drops BlackRock Absolute Return Fund

Hargreaves Lansdown has removed BlackRocks 1.8 billion UK Absolute Return Fund from its Wealth 150 list of top funds in each sector.

Hargreaves cites deterioration in stock selection by fund manager Mark Lyttleton as the key reason for the funds downgrading.

According to Hargreaves: Good stock selection is particularly vital in absolute return funds where the manager takes positions to benefit from both companies he thinks will rise in value, and companies he thinks will fall in value. As such they are entirely reliant on the managers skill in making the correct decisions.

The firm also highlighted the funds preference for larger, more defensive companies during a period where smaller, medium-sized companies performed particularly well.

We would like to see a sustained improvement in stock selection before reconsidering the fund for theWealth 150, which is reserved for what we consider to be the best funds in each sector for new investments, Hargeaves Lansown said. We therefore believe existing investors should generally continue holding the fund providing it still meets their objectives. We will continue to monitor the fund closely and will inform investors if our views change.

In an additional blow for Lyttleton, the firm has also dropped his UK Dynamic Fund from the Wealth 150.

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