Star managers caught out by Standard Chartered scandal
The latest furore to emerge from the banking sector could see the UK bank lose its licence in the US.
By Mark Smith, Senior Reporter
Tuesday August 07, 2012
Millions of pounds have been lost across a swathe of popular UK funds in the wake of the Standard Chartered scandal, according to the latest FE Trustnet research.
FE Alpha Manager’s Cedric de Fonclare
, Philip Rodrigs
and Hugh Young are among the best-known investors to include Standard Chartered in their top-10 holdings. In total, 67 funds in the IMA unit trust and OEIC universe hold the stock in their top-10.
US regulators has called the bank a “rogue institution” and accused it of hiding $250bn of financial transactions tied to Iran, in breach of sanctions against the authoritarian state.
Standard Chartered’s share price tumbled 20 per cent in this morning’s trading as the New York state department of financial services threatened to revoke its licence to operate in the United States.
The DFS said the bank’s “flagrantly deceptive actions” had left the US “vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes”.
The trio of de Fonclare, Rodrigs and Young each have more than 3 per cent of their portfolios’ assets invested in the firm, via the Jupiter European Opportunities
, Investec UK Alpha
and the Aberdeen Asia Pacific
Indeed, Aberdeen as a whole has a significant portion of its assets invested in the firm across a number of portfolios. Our data shows that Standard Chartered appears in the top-10 holdings of 12 of the asset managers’ funds.
Aberdeen Asia Pacific is one of the top-performing emerging markets funds in the IMA universe. FE data shows that it has returned 342 per cent over the last decade compared to 235 per cent from the average fund in the Asia Pacific ex UK sector.
Performance of fund versus sector over 10yrs
Source: FE Analytics
Schroders’ Richard Buxton
is also a big fan of the bank, telling FE Trustnet last month
that he has held the stock since he launched his UK Alpha Plus
fund back in 2000. It currently has a 2.9 per cent weighting in his portfolio.
The financial crisis has already eroded the reputation of banks across the world. Over-exposure to high risk debt securities was the root cause of the recession from which the UK is yet to recover.
This latest scandal is the latest in a long string to have hit the UK banking sector in recent years. This includes the mis-selling of payment protection insurance, and the more recent Barclays rate-rigging affair and money laundering scandal at HSBC.
FE Alpha Manager Jeremy Hall
told FE Trustnet
back in February that itwill be years before the banking sector can recover
from the dark days of the financial crisis. The Share Centre’s Graham Spooner believes these setbacks could well have lengthen that timeframe.
“You can divorce yourself from the historic problems and focus on the long-term projected earnings but there are still risks and it’ll be a long time before the sector is in good health again,” he said. “Lloyds is talking about a five-year turnaround plan and it’ll be a long run for the others too.”