Written by 10:48 am EU Investment

interactive investor kicks five funds out of its Super 60 list

Meanwhile, three additions were made, two of which are described as “contrarian”. 

The TM Crux European Special Situations fund, IFSL Marloborugh Multi Cap Growth fund, Royal London UK Equity Income fund, Mobius investment trust and iShares Environment Low Carbon Tilt Real Estate Index fund were all removed from the platform’s list.

The Super 60 list, which is reviewed by Morningstar and ii’s head of funds research, Dzmitry Lipski, saw the addition of the Fidelity Special Values investment trust, Janus Henderson European Selected Opportunities and Artemis Income.

Removals

The Super 60 is described by ii as “a range of funds, investment trusts, and ETFs that our team have handpicked as quality options for a your investing goals”.

On the portfolios culled from the list, ii said the removal of Crux’s European Special Situations fund was because of “recent missteps in the pursuit of high growth companies, evidencing a lack of consistency in the process”.

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Run by Richard Pease and James Milne, lost 11.1% in 2022, compared to the Investment Association Europe ex UK sector which lost 9%, according to the factsheet.

The removal of IFSL Marlborough Multi Cap Growth fund was due to questions regarding the process along with team resource and collaboration concerns.

ii said part of this was due to the “substantial small-mid cap exposure” which requires a larger amount of analysis.

“The review also highlighted an elevated level of churn within the portfolio, which raised questions regarding the process and costs to the end investor,” ii commented.

Meanwhile, the Royal London UK Equity Income fund was ejected from the list because its long-term manager, Martin Cholwilll, retired at the end of 2021 and so they now feel there are better choices among its peers.

Elsewhere, the Mobius investment trust was removed because it has lost a number of analysts since inception and now there is potential for key-person risk, given the current team is smaller and has less overall experience, according to ii.

Finally, the iShares fund saw a change of investment objective and name.

It was previously the Global Property Securities Equity Index fund and but it now tracks a low carbon index, giving it an ESG tilt.

“The change of benchmark has had a limited impact on index constituents at present, but this is expected to increase over time,” ii said.

Additions

The selection committee said it was adding the Janus Henderson fund as a core European equities option.

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The fund is managed by John Bennett, who they said is “very experienced” and has added “considerable value” through his stock selections.

He and his co-managers “pay close attention to global macro and sector trends as these provide valuable insights into the prospects of European companies and also look for contrarian trade”.

In the last calendar year the fund lost 5.8%, while the FTSE World Europe ex UK index lost almost 7% and the IA Europe ex UK lost 8.9%, according to the fund’s factsheet.

The Fidelity Special Values trust was added as an adventurous UK equities option.

Noting the experience of manager Alex Wright, the platform and Morningstar said it was a “strong option for investors seeking a contrarian and value oriented approach”.

Artemis Income was added as a core UK equity income option.

The fund has a value bias which had been a headwind, but is “not more pronounced than that of the average UK equity income peer”.

The annual review also saw the Man GLG Continental European Growth fund change from a core fund option to the adventurous category given its high conviction portfolio.

While over a five year period 77% of Super 60 has outperformed its peers, in the last year just over half (55%) did.

Lipski commented: “We will not get it right all the time – least of all in exceptionally turbulent times, and that’s in part why we choose a blend of strategies, risk profiles and product types. But it is important to be both transparent and long-term in our approach.”

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