Some 13 funds were found to deliver “insufficient value” in St James’s Place’s (SJP’s) latest Value Assessment Statement, published today (31 July), while only seven were deemed to fully meet the Financial Conduct Authority’s (FCA’s) value requirements.
SJP’s Global Equity, Global Emerging Markets, Global Absolute Return, Global Growth, and Global Smaller Companies funds all failed to meet the minimum standards across seven key criteria set by the FCA, which includes performance, charges, economies of scale and comparable market rates.
Other funds that failed to pass the requirements were: Balanced Managed, Greater European Progressive, Japan, International Equity, Managed Growth, Strategic Income and UK.
Five funds – UK Equity Income, which was overhauled in October last year, and the four Polaris funds, launched in November 2022 – were deemed ‘too early’ to be assessed.
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A majority of SJP’s mandates were found to have ‘broadly delivered value’, while seven portfolios exceeded all seven criteria. These were: Asia Pacific, Corporate Bond, Emerging Markets Equity, Global High Yield Bond, Global Value, Investment Grade Corporate Bond, and Worldwide Income.
The results come following a change to SJP’s Assessment of Value methodology, which has been altered as the firm now charges clients a single cost, encompassing all investing and advice fees as well as other services.
Therefore, performance assessments were all calculated net of fees, which the firm’s director of investments Tom Beal (pictured) said “will be reflected by a difference in the performance rating and the overall rating, when compared with last year’s report”.
Since SJP’s Assessment of Value report last year, the firm has made six changes to £13.2bn of funds. This included merging four funds to create the UK Equity Income Fund, moving the Emerging Market Equity Fund to a multi-manager strategy, and changing the manager line up of its Global Growth Fund.
From today (31 July), further manager line-up changes will come into effect on its Global Absolute Return and Japan strategies.
SJP has also reduced the annual management charges (AMCs) of 11 funds from today: Emerging Markets Equity, Global, Global Absolute Return, Global Equity, Global Quality, Global Value, Greater European Progressive, International Equity, Strategic Income and Sustainable and Responsible Equity.
The underperforming Global Emerging Markets, Global Smaller Companies, Japan and UK funds will see a reduction in their AMCs for 12 months, due to lacklustre returns.
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Beal said: “Our role is to protect and manage our clients’ wealth over the longer term so they can meet their financial goals. Creating good client outcomes is at the heart of our business. We continually monitor, review, and update our investment proposition to make sure we are delivering the best possible outcomes for our clients.
“We recognise that the journey is not always smooth when investing in financial markets, especially when it is challenging. 2022 was a difficult year for investors as the majority of asset classes posted negative returns.”
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