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Hargreaves Lansdown and AJ Bell drop Jupiter funds from best-buy lists

23 April 2024

The fund management group has haemorrhaged money in the first quarter of 2024.

By Jonathan Jones,

Editor, Trustnet

Both Hargreaves Lansdown and AJ Bell have dropped previously recommended Jupiter funds from their best-buy lists following the departure of veteran stockpicker Ben Whitmore.

Hargreaves, which had previously included both the Jupiter UK Income and Jupiter Global Value Equity funds in its Wealth List, took the decision to remove both.

The former has been taken over by Adrian Gosden and Chris Morrison, who joined Jupiter from GAM at the start of the year.

Senior investment analyst Joseph Hill noted that while the pair have a long track record and are “capable” and “experienced”, he reiterated that Hargreaves’ conviction had been with Whitmore.

“We don’t currently have the required conviction in them to remain on the Wealth Shortlist running this larger company biased fund,” he said.

Hill noted that the new duo are also value investors but they have historically invested more in smaller and medium-sized companies, which are higher risk than the larger firms preferred by Whitmore.

“The style the fund offers investors is one we feel we have well covered in our UK Equity Income fund selections on the Wealth Shortlist, where we have higher conviction in other managers. Jupiter Income will remain under research coverage and we will be updating clients of changes under the new management in due course,” Hill concluded.

Turning to Jupiter Global Value Equity, the plan is for the fund to remain under Whitmore’s control once he has set up on his own with the launch of Brickwood Asset Management.

Jupiter plans to hire Brickwood to run the fund on a sub-advisory basis, meaning it would remain under the manager and his team.

However, investment analyst Aidan Moyle said: “Running [the fund] on a sub-advisory basis causes additional complexity from a governance perspective.”

Hargreaves Lansdown looks at fund groups through multiple lenses, evaluating people and culture, governance, investment risk and oversight, compliance and audit, operations and portfolio management and the business’ financial strength.

“As things stand it’s unclear whether the new business would meet the required standards in these areas, for either Jupiter or Hargreaves Lansdown,” Moyle said.

“Jupiter has also not yet confirmed this is the direction it will take for the fund. As a result of this continued uncertainty, we have taken the decision to remove the fund from the Wealth Shortlist.”

The firm noted, however, that this was not a recommendation for investors to sell either fund at this time. “Investors should make sure any investments match their investment goals and attitude to risk and are held as part of a diversified portfolio. If you're not sure if an investment is suitable for your circumstances, please seek personal advice,” said Moyle.

Meanwhile AJ Bell has removed Jupiter UK Special Situations from its best-buy list, after it was announced former JOHCM UK Dynamic manager Alex Savvides would be moving over to take charge of the fund.

The firm had previously removed the JO Hambro fund from its list in October 2023 to “consolidate” its UK equity fund recommendations.

The news comes after Jupiter announced investors had withdrawn a net £1.6bn from the firm in the first quarter of 2024, with the majority (£1.1bn) being pulled from Whitmore’s funds. The departure of Chrysalis Investments and its managers Richard Watts and Nick Williamson, who are leaving Jupiter to focus full time on the trust, led to an £800m reduction in Jupiter’s assets under management (AUM)..

Group AUM rose however to £52.6bn after positive market movements contributed £2bn to its AUM.

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