Major holder moves JOHCM fund stake to seg mandates

Major holder moves JOHCM fund stake to seg mandates

A major client in the JO Hambro Capital Management UK Equity Income fund has shifted their stake into equivalent segregated mandates, meaning the fund's assets dropped by more than £500m in January.

Over the past year the mandate, managed by James Lovren and Clive Beagles, has returned 10 per cent compared with 9 per cent for the average fund in the IA UK Equity Income sector in the same time period. 

The fund has returned 161 per cent over the past ten years, compared with 119 per cent for the average fund in the sector in the period. 

Darius McDermott, managing director at Chelsea Financial Services, said: “The fund’s performance has been good over a long period of time, though the managers use the value style of investing which has fallen from favour with investors, and is also significantly invested in mid and small cap companies, which are more exposed to the UK economy.”

A representative of JO Hambro Capital Management said: "The fund size reduced following the long-planned move by our largest client to transition out of the fund into two segregated accounts, a shift that happened in early January. These two separate mandates are managed by us using exactly the same process that we use to manage the fund and the stocks held are identical. To that end, whilst there has been a drop in fund size, there has been no change in the overall size of the strategy, which remains c. £3.2bn.

"The greater political clarity following the UK election result has translated into modest inflows, and we remain focused on controlling the size of the fund and overall strategy to preserve liquidity and safeguard the interest of our clients."

Separate Morningstar figures show the fund with the largest net inflows in January was the BlackRock ACS World Low Carbon Equity Tracker, which had net inflows of £702m in the month, and £1.2bn over the past year.

That helped BlackRock to the top of the list of firms with the largest inflows during the month, at £1.1bn.

Jonathan Miller, head of manager research at Morningstar, said:  “Over net £700m was added to the fund as the drive into environmental, social, and governance investments continues.”

The travails at Invesco continued, with £791m leaving in January. In addition to the Absolute Return fund and the UK Equity mandates run by Mark Barnett, the total included a £90m outflow from the firm’s European equity fund.

Another fund house to suffer outflows was M&G, which had a total of £409m leave the firm in January. 

The cash that left was predominantly held in the M&G Optimal Income fund, managed by Richard Woolnough, and the M&G Corporate bond fund.

Mr McDermott said it may be that investors are worried these funds have become too large to be effective investments in the future.

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