John Ions has said he will not reduce the price of his company’s funds after broking giant Hargreaves Lansdown removed one of its funds from a preferred list due to “high fees”.
The Bristol-based FTSE 100-listed broker removed the Liontrust Macro Equity Income fund from its Wealth 150 list of preferred funds citing recent “weakened” stock selection but also “relatively high fees”.
The fund is run by longstanding duo Stephen Bailey and Jan Luthman and since launch in October 2003 is the best performing fund in the IMA UK Equity Incomce sector, according to data from FE Analytics.
Liontrust chief executive John Ions said he would not be altering pricing on the fund or any others at the group.
“I would not criticise [Hargreaves] for taking us off the list because their business model has been successful but it doesn’t mean I should change mine because they tell me to,” he said.
Mr Ions added he thought the pricing of the funds - whose unbundled share classes carry an ongoing charge of 0.9 per cent - was “fair” and “the performance of our funds justifies that”.
He said the group had a “consistent” strategy for clients meaning “we don’t bend pricing to suit individuals”.
“I may be right or I may be wrong, but we don’t try to get business by offering some a slightly cheaper price than the next person,” he said.
Of the eight funds left within the UK Equity Income part of the Wealth 150 list, five have agreed preferential management charges with Hargreaves Lansdown.
Mr Ions said Mr Luthman and Mr Bailey’s track records were “second to none” and that the way the duo manage the fund produces strong, long term performance.
Hargeaves senior analyst Laith Khalaf said the fund had delivered “good returns over a long period” but stock selection had been “weakened of late”.
“In addition, the Liontrust fund has relatively high fees, and was the most expensive Wealth 150 fund in the UK Equity Income sector,” he said.
“Where we feel a fund is exceptional, it can be worth paying a higher management charge.
“However, we hold the remaining Wealth 150 fund managers in equal or higher regard, and their funds also have lower management charges to boot.”
Mr Khalaf stressed the move was “not a suggestion for existing investors to sell the fund” as long as it continued to meet their objectives.
“We believe Jan Luthman and Stephen Bailey will continue to produce a good combination of income and capital growth for investors over the long term,” he said.
