When it was launched in June 2006 there were high hopes for Skandia’s Global Best Ideas Fund. Designed to take the best share tips from ten of Britain’s best fund managers, and put them all under the roof of one fund, it was, said New Star founder John Duffield, “a superb idea”. Hargreaves Lansdown agreed and immediately added it to their influential list of recommended funds, the Wealth 150. So two years on, how is it going?
Mixed. The fund is up 22% since launch, which isn’t bad. But it has also fallen 7% in the last year, due to the fact that 22% of the portfolio is made up of finance-related firms. Skandia won’t say how well individual managers perform, but “certain managers’ ‘best ideas’ are likely to have played a part” in the year’s unfortunate streak, says The Mail on Sunday.
The fund does have some of the most experienced names in the business on its list (among them is Blackrock’s Richard Plackett and Aberdeen Asia Pacific’s Hugh Young). But that doesn’t mean they always get it right.
New Star’s Stephen Whittaker is “notorious for his hoarding of bank shares”, for example (his own New Star UK Growth fund is down 29.3% over the past year), so his ‘best’ ideas probably haven’t helped much. The other reason to be wary of the Global Best Ideas fund is its price. The fund’s total expense ratio is 2.5%. That’s expensive even for your average managed fund – and particularly so if, as it seems, the concept isn’t delivering.
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