Axa Investment Managers’ Chris St John has sold out of St James’s Place in his UK Select Opportunities fund, following increasing scrutiny on the fees charged by the group.
St John (pictured), who took over from Nigel Thomas on the UK Select Opps fund in December, said he sold out of SJP from his off-shore multi-cap fund “some time ago”, alongside PayPal and Betfair.
Speaking to Portfolio Adviser, he said: “It was a combination of valuation really, and a deteriorating sort of outlook for the businesses. Particularly, I felt as though there had been increasing scrutiny on the fees charge at St James’ Place which had come under pressure over time. And when you combine that with the valuations that companies are trading on, it made sense to exit.”
In 2017, SJP faced a number of complaints and a study from Which? outlined that the group is extremely expensive with typical upfront costs of 5%, which is 40% higher than would be paid to an IFA.
The consumer watchdog organised 12 undercover meetings with advisers from SJP, who are only able to give restricted advice, for which they earn commission.
St John said the changes were made in the build-up to the handover while he was still working with Thomas, not after he took over. “What I didn’t want there to be was, ‘So, here’s the fund, and right now I’ll make the changes’.”
Underperformance
On a one-year, three-year and five-year, the UK Select Opportunities underperformed the IA UK All Companies Sector, with returns of -0.7%, 16.4% and 18.9% versus the latter’s -1.4%, 25.5% and 24.1%, according to FE.
St John said the underperformance of the UK Select Opportunities fund was down to stock-specific setbacks. He said this also led to the sell out of SJP.
Portfolio Adviser reached out to Axa Investment Managers but the firm declined to comment further.
