Hargreaves kicks Geffen fund from Wealth 150

Hargreaves Lansdown has kicked Robin Geffen’s £684.1m Neptune Global Equity fund out of its list of recommended funds after several years of underperformance.

The discount broker has removed Mr Geffen’s fund from its Wealth 150, citing a “prolonged period of underperformance coupled with negative stock selection”.

Mr Geffen, who founded Neptune and manages several funds at the group, has been running the Global Equity fund since its launch in December 2001.

Article continues after advert

Since launch the fund has significantly outperformed its IMA Global sector peer group and its benchmark, the MSCI World index, but it has struggled in recent years.

The fund is in the bottom quartile of its sector in three and five years, having lost money in the past three years compared to a 20.2 per cent rise from the average IMA Global Equity sector fund.

In a note today, Charlie Huggins, an analyst at Hargreaves Lansdown, said the fund’s high exposure to emerging markets had historically helped performance but had caused the fund to struggle in recent years.

Mr Huggins said that even though Mr Geffen had adjusted the regional exposure to be more heavily weighted to the US and Japan in recent years, the stocks he has picked have still been heavily focused on generating earnings from emerging markets and those kinds of companies have struggled recently too.

He said: “A recovery in emerging market stocks may well lead to an improvement in the fund’s performance, but we have become concerned with a lack of value being added at the stock selection level.”

A spokesperson for Neptune said: “We are disappointed to learn of the decision to remove the Neptune Global Equity fund from Wealth 150.

“Whilst accepting that the fund has experienced a difficult period from 2011 to early 2013,the most recent three quarters have shown a marked improvement in the fund’s performance.”

Neptune said the turnaround in performance was due to the changes to a more “OECD-focused portfolio” and a change in the markets to favour the more cyclical sectors that the fund invests in.

The spokesperson said: “In light of the turnaround in performance over recent quarters due to the efficacy of these changes, and of our conviction in the durability of their effects, we see our removal from this list as an unfortunately timed decision.

“The fund continues to be managed in the same manner and by the same people who are responsible for the strong long term track record and we remain confident that despite an interval of disappointing results, the fund will continue to provide significant relative returns in the future.”