FE Trustnet reported last month that the boutique firm had performed a U-turn over soft-closing its UK Opps fund, as the £1.2bn portfolio had breached the £1bn maximum capacity limit outlined in its prospectus.
However, in recent weeks JO Hambro has pulled back from marketing both JOHCM UK Equity Income and FE Alpha Manager John Wood’s £985m UK Opps portfolio.
"We’re not at the stage of increasing the initial charge, which we did on the income fund when it reached its first capacity limit of £750m," said Philip Lund, investment communications manager at the firm.
"Rather than do that, we are easing back on sales guys going into meetings with new clients and promoting these funds."
"We have a principle of capping portfolios here at JO Hambro when we deem that they are getting too big."
"At this stage, we have had no performance issues [as a result of fund size], and we have no intention to soft-close at the moment."
The term "soft-closure" is a particularly vague term in investment management. In recent months, Aberdeen has stopped marketing its flagship Emerging Markets fund, which the firm now refers to as soft-closed as a result. However, Lund says JO Hambro has a different definition.
"We deem a soft-closure as a big change in the fee structure, which we haven’t done on either fund," he explained.
The JOHCM UK Opportunities and JOHCM UK Equity Income funds, which have four and five FE crowns respectively, are both top-quartile performers in their respective sectors since launch, as well as over a five-year period.
The UK Opps fund is the least volatile of the two, and is also a top quartile performer over three years.
Performance of funds vs sectors
| Name | 1-yr returns (%) | 3-yr returns (%) | 5-yr returns (%) |
| JOHCM - UK Opportunities | 20.12 | 41.8 | 28.76 |
| IMA UK All Companies | 20.23 | 29.56 | 5.44 |
| JOHCM - UK Equity Income | 27.99 | 37.39 | 30.89 |
| IMA UK Equity Income | 19.56 | 31.12 | 5.74 |
| FTSE All Share | 20.09 | 31.59 | 8.75 |
Source: FE Analytics
Both funds use the All Share as their benchmark, which they have beaten over one, three and five years.
Concerns over liquidity are particularly pertinent for these two portfolios, given that they have an overweight in mid cap stocks.
FTSE 250 companies DS Smith and 3i Group are both top-10 holdings for James Bowen and Clive Beagles' JOHCM UK Equity Income fund.
The funds have a minimum investment of £1,000 and a total expense ratio (TER) of 1.28 per cent. Both charge an annualised performance fee of 15 per cent on any returns in excess of the All Share.