Let’s get the bad news out of the way first. In April, Swip announced it was to cut 23 roles across its equities business as part of a major repositioning of its range. The rationale was some woolly plea about a divide between investors seeking “high-alpha solutions” and those wanting a “lower-risk strategy through a quantitative-base approach” but the crux of the matter is that relative performance has been thoroughly disappointing.
Bestinvest summarised this in its recent ‘Spot the Dog’ report of consistently underperforming funds – Swip/Scottish Widows were “top mongrels” with 10 funds totalling a staggering £5.98bn of assets, two-thirds of the group’s total assets under management.
Still, at least the group is finally addressing its problems. Two of those funds in the firing line, Scottish Widows UK Select Growth and Swip UK Opportunities, have a new manager – James Clunie.
They were previously managed by Peter Cockburn, who has now been made redundant from his role as head of UK equities. Both funds have fallen way behind the three-year UK All Companies average (33%), with the former having delivered 19% and the latter 16% over the time frame, according to FE Analytics.
That Swip has been so open about its new strategy – a three-pronged focus on global, specialist and quantitative equities also demonstrates a willingness to improve. At the very least, a change of strategy invites fund pickers to carry out proper due diligence and reassess the future prospects of these vehicles.
Things can only get better for Swip though those negative headlines might continue for a while yet – it has also warned of the closure of a number of smaller regional equity funds to come as well as others that it says are no longer economically viable to manage.