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SJP fund performance questioned in new analysis


Only two of 26 funds offered by St James’s Place have outperformed their benchmarks over both one year and five years, and since their inception, a new analysis shows.

Data compiled on behalf of Money Marketing by Square Mile on 26 unit trusts offered by SJP shows that 29 per cent of funds have out-performed over the past five years and nearly 40 per cent have out-performed their benchmark since inception.

Ten of the 26 funds have underperformed when looking across one year and five years, and since inception, however.

Of the 36 funds currently offered by SJP, Square Mile said it could assess only 26 because the funds’ reports often displayed more than one representative index, making it harder to compare them.

SJP claims performance comparisons should not be made on single funds but on SJP-recommended portfolios, which its clients usually buy. It says the most appropriate benchmark is the Asset Risk Consultants Portfolio Index, which collates risk-rated portfolio returns from 60 investment managers.

An SJP spokesman says: “SJP funds are monitored against the unique investment objective for each fund, and are presented net of all associated costs — i.e. all advice costs, platform or administrative charges, product tax wrappers and external fund manager fees. Therefore, a comparison with an index in this way is misleading.”

Eight SJP portfolios’ relative performance figures provided by the firm show that two have under-performed the ARC index over three years and one has underperformed since launch.

SJP adviser hits back at Sunday Times charges criticism

Architas investment director Adrian Lowcock says: “Effectively, [SJP] is saying it has bundled all its costs into the fund, which means the client has no idea what they are actually paying.

“[It is] not really in the spirit of RDR because investors cannot do a genuine comparison. While performance isn’t good, SJP is clear on the fact performance is after costs, which fundamentally is most important.

“It is perfectly reasonable to assess both its asset allocation and fund selection skills. If it doesn’t value the latter, using trackers would be the best approach.”

According to SJP reports in March, costs for the funds, which are close to 2 per cent in most cases, include advice, platform and administrative charges. The reports state performance is calculated after cost.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Nearly 2%, What on earth is going on, the FCA should suspend this rag tag and bog sledge of a firm, If we are seeing 0.5 from providers how on earth is this contingent charging post RDR being allowed to continue, O Yes that’s right they use it to finance their Buy-Out’s, conventions and Glossy paperwork

    • When it comes to application of the requirements of the RDR, the FCA allows SJP a uniquely wide degree of latitude. The burning question, of course, is: Why?

  2. In fairness to SJP, most fund management groups wouldn’t better the 5-year performance v benchmark figures but that’s because most funds don’t outperform their benchmarks. For actively managed portfolios (SJP don’t ‘do’ trackers). Total costs of 2% per annum aren’t unreasonable if the investment performance and value added by financial planning is good. That all said, I still can’t understand why anyone would want to restrict their investment choice to one, very average imho, provider. There are maybe 2-300 funds on sale in Europe that are worth investing in (out of 13,000 or so). I don’t believe any SJP fund is in that exclusive list.

  3. The Sunday Times “charges against St James Place ” may be more oto do with the fact St James Place advises Sunday Telegraph Readers ? than any good reason. I wonder how St James Place funds stack up against the With Profits Funds or SWF Unit Trusts ( Dog Funds) from Indepnedent reviews ? It seems thegreat results of SJP to theri custoemrs is the envy of the rest of their sector – and instead of creating competition and better returns as usual they slag em off ! Glossy paperwork is the result of hard work behind the scenes – and in front of more clients than the rest of the industry put together – I suspect?

  4. No one dislikes SJP more than I but is this really a story or just another attack for the sake of it. It is quite easy to make any company look good or bad.

  5. How can fund performance be net of advice charges when advice charges are client agreed?

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