Bri­tain’s big­gest bro­ker cuts pop­u­lar names from fund rec­om­men­da­tion list

The Daily Telegraph - Your Money - - OPINION - Jonathan Jones

Har­g­reaves Lans­down has cut 27 funds worth al­most £70bn from its rec­om­men­da­tion list, with sev­eral pop­u­lar man­agers fail­ing to make the grade.

Be­fore the reshuf­fle, al­most half of all as­sets in­vested through the fund shop were held in funds on its Wealth 150 or Wealth 150+ best-buy lists. The two were sim­i­lar, al­though the lat­ter fo­cused on funds that have lower fees.

The lists have been com­bined and con­densed to cre­ate the Wealth 50. The name is slightly mis­lead­ing as there are 60 names on the list made up of 50 ac­tive and 10 pas­sive funds.

In­vestors will get, on av­er­age, a 30pc dis­count on fund fees from those on the list, Har­g­reaves Lans­down said.

Mark Dampier, the firm’s re­search direc­tor, said: “We have fought tooth and nail to get prices down. We would be short-chang­ing ev­ery­one if we ac­cepted a higher-priced fund – those that have given me the lower price would think they could get on the list with­out of­fer­ing a dis­count. ”

Of the funds re­moved as part of the re­launch, Richard Wool­nough’s £21bn M&G Op­ti­mal In­come fund is the largest. A num­ber of other well­known names have lost out: Me­rian’s Richard Bux­ton and Richard Watts, Jupiter’s Alexan­der Dar­wall, Fidelity’s Alex Wright and Black­Rock gold ex­pert Evy Ham­bro were all missed off

Funds with spe­cialisms such as tech­nol­ogy or oil are un­likely to make the list from now on, Mr Dampier said. There are also no in­vest­ment trusts, listed funds that trade on the stock mar­ket, as in­vestors can­not trade them as eas­ily as funds.

Three new funds were added to the list: Ja­cob de Tusch-Lec’s £3.9bn Artemis Global In­come fund, the £880m Aviva In­vestors UK Eq­uity In­come fund and the £63m Uni­corn Out­stand­ing Bri­tish Com­pa­nies fund run by Chris Hutchin­son, by far the small­est fund on the list.

A sur­prise to some will be the in­clu­sion of the Wood­ford. Eq­uity In­come fund, run by strug­gling man­ager Neil Wood­ford. In­vestors have been pulling their money from the fund as it has been one of the worst per­form­ing UK in­come port­fo­lios in each of the past three years.

How­ever, Mr Dampier said that he re­mained will­ing to back the man­ager, al­beit with some con­cerns.

“We ag­o­nise over peo­ple like Wood­ford all the time,” he said, be­fore adding that man­agers in­cluded on the list are there for the long term and should be backed even when go­ing through difficult pe­ri­ods.

Mr Dampier added that Mr Wood­ford has been through two worse pe­ri­ods in his in­vest­ment ca­reer than the cur­rent slump, and has come out of the other side.

“I could be spec­tac­u­larly wrong this time,” he warned.

Renowned in­vestor Terry Smith’s highly suc­cess­ful funds have never been on the lists. Har­g­reaves said this was not be­cause Mr Smith did not of­fer a dis­count, but be­cause sim­i­lar funds were avail­able that carry a lower fee.

Un­der-fire man­ager Neil Wood­ford sur­vived Har­g­reaves Lans­down’s cull

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