Hargreaves Lansdown chief executive Peter Hargreaves has hit out at Chelsea Financial Services and Bestinvest’s worst-performing fund lists, claiming they are “cheap publicity stunts” which do not help investors.
CFS’ Relegation Zone and Bestinvest’s Spot the Dog reports name and shame the worstperforming actively managed funds available to UK investors to help them maximise portfolio returns.
But, writing in this week’s Money Marketing, Hargreaves questions the firms’ motivations and suggests they should focus on highlighting top-performing funds.
He says: “Do they really believe that investors will go to them because they are slagging off the very product that they sell?
“Any half-witted jerk can look at the performance tables and find out what ’they shouldn’t have bought’. Why don’t we ask Best and Chelsea to put their reputations on the line and tell us what we should be buying.”
CFS says it publishes a buy list which is perfectly accessible to clients and says its report is produced to highlight underperforming funds to clients who may wish to consider switching.
Managing director Darius McDermott says: “There are over 2,000 unit trusts, is it doing the industry a disservice to highlight 100 or so underperforming funds? I do not think so. Peter is entitled to his view but I could not be further from agreeing with him.”
Bestinvest says its report is designed to help investors do background research before deciding on what funds they should both buy and sell.
This includes fund recommendations and a graph for clients to compare holding a best of breed fund versus a dog fund against its benchmark.
Senior investment adviser Adrian Lowcock says: “We do not believe that investors and ultimately the fund industry benefit from silence about those funds and managers that consistently fail to deliver.”