As Table 4shows, the ranking of funds purely by their information ratios versus their benchmarks throws up a few different names. In some cases this is down to funds standing out more against their chosen indices than peers. But in other areas, such as mixed asset, the appearance of new names is due to funds from Table 2, such as Jupiter Merlin Conservative Portfolio, not listing a benchmark in the first place.
A look at the ongoing charges figures for the funds shows that these vary significantly. Given the limited yields and returns on offer in the fixed income space, it’s inevitably the bond funds that carry the lowest charges, of between 0.57 and 0.77 per cent.
In contrast, Jupiter Merlin Conservative Portfolio and Baring Japan Growth both have OCFs of more than 1.7 per cent.
With fee pressure continuing to drive down fund charges, some of these may look steep, and prove difficult to justify to clients.
For now, they’re not out of line with similar peers’ own fees. And when it comes to client conversations, returns after charges will be the most important point of discussion.
That said, difficult conversations, workloads and compliance worries may put some intermediaries off these names. Much as plenty of small funds are outperforming, they risk remaining overlooked for now.
