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Old Mutual in attack on supermart rival Cofunds

Old Mutual has made a blistering attack on Cofunds, claiming the average annual returns on funds offered by its supermarket rival are significantly lower than funds on its own Selestia platform.

Old Mutual says the annual returns over the last three years on the 31 UK equity funds available from the four founders of Cofunds – M&G, Jupiter, Gartmore and Threadneedle – average just -1.25 per cent.

In contrast, it says the average annual return over the last three years of the 37 UK equity funds available on Selestia is 6.58 per cent.

The assault on Cofunds comes a fortnight after Selestia, which launches next month, announced that its starting list of fund providers will not include big names such as Cofunds&#39 four founders, Henderson and Fidelity.

Selestia marketing director Bill Vasilieff believes that missing the big names will be no great loss to the platform. He says: “It is widely agreed that asset allocation accounts for over 90 per cent of the variation in portfolio performance. Once an asset allocation is complete, the different asset classes should be populated with funds that exhibit above-average risk/return performance. As we know, big names do not always equate to big performance.”

Cofunds head of sales Rodney Aldridge says: “We have never seen ourselves as having an influence over which funds should be on the platform. The groups which are on Cofunds are driven by what IFAs want.”

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