Head To Head

HEAD-TO-HEAD: JOHCM versus Threadneedle

FSA compares two UK equity products: the JOHCM UK Dynamic Fund and the Threadneedle UK Extended Alpha Fund.

by Rupert Walker 20 August 202120 August 2021

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Darius McDermott, Chelsea Financial Services

Introduction

A Brexit trade deal late last year and the robust economic recovery from the coronavirus pandemic raised expectations for UK equities, after their dismal performance in 2020.

Certainly, UK stock prices have bounced back, but their performance has lagged the S&P 500 and world indices.

The FTSE All Share and FTSE 100 are up 13.2% and 12.1%, respectively, compared with 18.4% by the US bellwether and 15.8% by the MSCI World index, according to FE Fundinfo.

Despite heathier economic activity in the UK, the country’s retail investors seem unimpressed.

Funds invested in UK equities posted £2.2bn ($3bn) in outflows during the first half of the year, according to data from the Investment Association (IA), an investment industry trade entity.

The exit from UK equity funds contrasts with a £24bn wave of cash moving into global retail funds, that provide greater exposure to tech stocks and high dividend payers.

Against this background, FSA asked, Darius McDermott, London-based manager director at Chelsea Financial Services to select two UK equity products for comparison: the JOHCM UK Dynamic Fund and the Threadneedle UK Extended Alpha Fund.

	JOHCM	Threadneedle
Size	$1.87bn	$120m
Inception	2009	2004
Managers	Alex Savvides	Chris Kinder
Cumulative return	12.90%	9.93%
Annualised return	5.48%	4.84%
Annualised alpha	-3.12	-6.53
Annualised volatility	28.51%	26.78%
Information ratio	-0.42	-0.61
Morningstar star rating	***	***
Morningstar analyst rating	Silver	Neutral
FE Crown fund rating	*	*
OCF (retail share class)	0.80%	0.83%

Source: FE Fundinfo, Morningstar. Data in US dollars

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