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JOHCM sets sail on US vessel

JO Hambro Capital Management

JOHCM American Growth Fund

Type: Oeic

Aim: Growth by investing in medium and large US and Canadian companies

Minimum investment: Lump sum 1,000

Investment split: !00% in medium and large US and Canadian companies

Isa link: Yes

Pep transfers: Yes

Charges: Initial up to 5%, annual 1.25%, performance fee 15%

Commission: Initial 3%, renewal 0.5%

Tel: 020 7747 5678

JO Hambro Capital Management has brought out the JOHCM American growth fund for former Tilney manager Nick Roe-Ely.

Chase de Vere Financial Solutions research manager Justine Fearns says: For fans of JOHCM, this is a good addition to its stable of funds in one of the major investment sectors. Getting a fund manager with so much experience and a strong track record is quite a coup, as good US asset managers who consistently beat their target or benchmark are becoming harder to find.

Fearns notes that Nick Roe-Ely has 22 years experience of US markets. His entire business career has been at Tilney, from where he has recently joined. This highlights another positive, in that Nick does not have the propensity to jump ship; then again when your figures are looking good, you dont have to, she says.

JOHCM has a young and entrepreneurial culture and Fearns says that while it provides support and information in areas such as ideas generation, compliance and risk management, it leaves the investment process and philosophy completely down to the fund manager.

Nick Roe-Ely has a very defined investment process and philosophy. A bias towards mid cap stocks with growth orientation means that its easier for investors to keep track of. In addition, a concentrated holding of 30-50 stocks and generous stock and sector constraints gives scope to actively take positions against benchmark. This process and investment rationale is comprehensively presented in the literature that currently supports the soon to be launched fund, says Fearns.

Consistent with JOHCMs attitude towards its fund managers, Ely-Roe can chose an analyst of his choice. He has yet to appoint an analyst but we can safely assume that it will be someone he is very comfortable working with and who has excellent credentials, says Fearns.

Considering the charging structure of the fund Fearns says: The American growth fund, consistent with the other JOHCM funds has performance fees and a target size at which it will close. A performance fee of 15 per cent is charged for every 1 per cent out performance of the S&P 500 on a daily basis, this runs with a high watermark, and the fund will close at about 500m.

This is currently different when compared to most investment houses and is a defining feature of JOHCM. There is quite a debate over performance fees, but as long as they are not skewed in favour of the investment house, they can help towards aligning fund manager and investor interests.

Considering the potential downsides of the fund Feans says: I like the fund but some investors would disagree. Performance fees, fund capping and allowing fund managers off the leash are not everyones idea of the best way to run money; but I would argue that its stood JOHCM in good stead to date.
Scanning the market for possible competitors Fearns says: Any US fund that is performing well at the moment will be a competitor. Edging towards the funds with a mid cap bias, wed have to look at GAM and Fidelity, though they are all run on very different principles and in some cases have had their own problems.

Suitability to market: Good
Investment strategy: Good
Charges: Average
Adviser remuneration: Average

Overall 8/10


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