Former M&G star manager leaves Britain’s oldest fund

Veteran fund manager Tom Dobell is stepping down from Britain’s oldest fund – M&G’s £1.4bn Recovery fund, after more than 20 years and a recent period of extremely poor returns.

Over the past decade the fund has made investors just 14pc while the FTSE All Share index – the fund’s benchmark and a barometer of the British market – is up 79pc. The average British fund manager also made 79pc.

Mr Dobell will be replaced by Michael Stiasny, a deputy manager of the fund since 2011 who also runs the £921m M&G Dividend portfolio.

The veteran investor will step down from the fund, that first launched in 1969, at the end of the year.

M&G said the fund will continue to invest with a “value” style – where the manager buys undervalued companies in the hope share prices rebound – but will move away from relying heavily on blue chip stocks and move towards mid-sized firms.

Mr Dobell was still trusted by many investors and managed more than £1bn, despite prolonged poor performance.

Returns in his early days were strong. In his first 10 years he returned 28pc despite his tenure including the worst of the 2001 and 2007 stock market crashes. The FTSE All Share lost investors 21pc over the same period.

This helped propel the fund to become one of the largest in Britain by 2012, boasting more than £8bn in assets.

Then Mr Dobell’s value style fell out of favour as investors moved towards quality stocks with reliable earnings and fast-growing businesses. The gigantic portfolio also became difficult to manage and Mr Dobell began trying to spread the assets across too many businesses, a factor he later admitted to.

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