St James’s Place Wealth Management has placed two funds on a watchlist over performance concerns.
In its 81-page value assessment released today (July 13), of its 42 funds, nine were placed on an “amber” list with a further two placed on the more serious watchlist.
The two placed on the watchlist, the Alternative Assets fund and Japan fund, were said to have shown areas which “challenge” whether overall value is being delivered. SJP said neither fund had achieved their objective of capital growth.
The Alternative Assets fund, which has a value of £290m, is managed by Wellington Management which has run the fund since September 2018.
Over the last three years the fund posted a return of -19.9 per cent, however in the past three months it has posted a 3.7 per cent return.
SJP said the fund’s underperformance compared with its benchmark was “heavily impacted by the underperformance of the fund’s value investment style skew, trend-based strategies and the challenges faced by similar alternative asset funds in recent years”.
It added since the last value assessment, when the fund was on the “broadly delivering value” list, one above the watchlist, it had taken steps to refocus the investment strategies by the manager.
The Japan fund, which aims for long term capital growth by investing in shares either listed on exchanges in Japan or with economic exposure to Japan, was created in November 2017 and is run by Nippon and Comgest.
The latter was added to the fund’s management in March this year due to concerns over underperformance.
In the three years to March the fund lost 16.2 per cent - though over the past year it has returned 31 per cent.
Its benchmark, the TSE Topix index, returned 17.3 per cent over three years and 39.9 per cent over the past year.
In the value assessment, SJP said it remained confident that Nippon will deliver long-term value for money, and highlighted the additional manager being added.
It said Comgest’s investment style, called ‘quality growth’, would balance out Nippon’s value style.
“We will continue to monitor all our funds and are committed to enhancing them if we believe it will improve long-term investment outcomes for our clients," SJP added.
Amber list funds
The funds that appeared on the “amber list” included the UK Income, UK Equity and UK & General Progessive funds, as well as the Gilts, Global Emerging Markets, Global Smaller Companies, Index-Linked Gilts and Money Markets funds.
SJP has since merged its UK growth and equity funds into the general progressive fund and renamed it the UK fund. The move saw it bring Baillie Gifford and LA Capital Management on board, while Majedie Asset Management was removed as a manager.
In the value assessment, SJP highlighted how since its last value assessment it had split its investment committee into four specialist committees to encourage a top down approach, as well as investing in a team of internal analysts who select managers and monitor funds.