James Clunie’s absolute return fund has shed a third of its assets in a month as investors flee the targeted return sector and his bets against Tesla and Scottish Mortgage have soured.
Assets in the Jupiter Absolute Return fund have fallen by an estimated £357.5m since the start of February. The fund’s last factsheet shows it was sitting at £975m at the start of the month, but data from Trustnet shows it is currently at £617.5m.
The fund has shed more in a little over a month than it did in 2019 when assets tumbled £299m, taking it from £1.5bn to £1.2bn, according to Morningstar flows data.
Portfolio Adviser understands the bulk of the falling assets in the fund (around 85%) was from customers pulling money out, while the remainder is due to performance-related movements. This gels with data from Morningstar which show the fund suffering £266.7m net outflows in February.
Jupiter declined to comment.
Battered by Tesla and Scottish Mortgage shorts
Clunie’s fund has come under intense pressure with the fund languishing near the bottom of the IA Targeted Return sector for several years.
It has lost investors 13.5% so far this year. Investors in the fund are facing double-digit losses over all meaningful time horizons.
Jupiter Absolute Return performance vs IA Targeted Return sector
| 3m | 6m | 1y | 3y | 5y | |
| Jupiter Absolute Return | -13.1 | -13.0 | -15.9 | -20.9 | -11.0 |
| IA Targeted Return | 0.1 | -0.2 | 2.1 | 2.6 | 5.8 |
Source: Trustnet
Things took a turn for the worse last month when Clunie became one of the casualties of Tesla’s share price tripling in value. Clunie and hedge fund manager Crispin Odey were among the investors pushing Tesla to become the most shorted stock in the US with 17% of shares on loan.
Clunie’s scepticism over Elon Musk’s electric car company pitted him against “nemesis” Scottish Mortgage fund manager James Anderson whose trust he also has a small short out on.
Shares in Tesla have fallen back down to $634 a share after peaking at $969 the first week of February but are still up 50% year-to-date.
Though Clunie’s fund has suffered for most of the year, it rose into positive territory briefly during the coronavirus-induced sell-off in late February as growth stocks like Amazon and Netflix that it shorts saw their share prices hit.
Discretionary managers have generally been yanking money from absolute return type funds. The IA Targeted Return sector was the worst-selling retail class last year with investors pulling £4.9bn from the asset class.
Jupiter has continued to pledge its support for Clunie as his long run of underperformance drags on.
Last month the FTSE 250 fund group announced it would be shutting a sub-fund of Clunie’s Jupiter Global Levered Absolute Return fund after it was unable to cope with a wave of redemptions.
