Our friends at Morningstar have sent over the latest monthly flows report and we’ve picked out some of the highlights to share with you.
First, JOHCM UK Dynamic experienced a torrid month – with investors pulling £266mn from the fund. And year-to-date, that totals £836mn upping sticks to go elsewhere.
Since the start of 2024, the fund has shrunk from £1.3bn in size to £500mn.
The fund house has obviously been keen to reassure investors that all is well after JOHCM UK Dynamic manager Alex Savvides was poached by Jupiter.
But the intriguing thing is that Jupiter Special Situations - the fund Savvides will run following the departure of Ben Whitmore to set up a boutique - has not had a notably better time of things lately, despite Jupiter announcing his appointment at the same time as Whitmore's departure to give the impression of everything being planned and under control.
Investors pulled £367mn from Jupiter Special Situations across the month.
Such outflows represent about half of the total since Whitmore announced he was setting up his boutique. This is particularly stark given we reported in March that the fund had only shrunk by £120mn in the first two months following the exit news.
Year-to-date, £745mn has exited the fund, according to data from Morningstar Direct. This means that since January the fund has shrunk in size from £2.1bn to £1.5bn.
Mark Harries, chief investment officer at Square Mile, outlined for us four choices facing allocators in these circumstances.
“I suppose there’s several scenarios,” he said.
“One is you retain the fund through the change. Two is that you sell it and you follow Ben into the next house. The third iteration of that could be you choose something completely different as a replacement. Or actually there is a fourth, which is that you just reinvest back into your other solutions that you might have.”
We can only speculate as to why April was the cruellest month for both mandates - it's possible quarterly rebalances played a role - and last week some delayed start dates for the incumbent and successor have been announced. Whitmore’s leaving date has been pushed back from July 31 to October 31, with Savvides joining on October 7, allowing for a three-week handover period.
Whether or not this clarity will be enough to stem the tide in terms of flows remains to be seen – as several allocators, including Square Mile, are yet to make a final decision on the fund.
So, where’s the money flowing instead?
Elsewhere in the equity sphere, investors are going firmly global with their money: inflows into global large-caps hit over £1bn in May, which represents over one-third of the total inflows year-to-date, said Morningstar.
Fidelity Index World was the main beneficiary of this investor love, scooping up £370mn of that £1.1bn.
On that note, we recently covered the ways in which DFMs are differentiating their global equity exposure away from MSCI World trackers by going active – but after such a strong month for Fidelity, it seems as if we might observe some more allocators piling into this mandate.
Fidelity Index World is held by three DFMs, which makes it a less popular product than some of its active counterparts, such as Fundsmith and Ninety One Global Environment, but this may well change.
