Hargreaves cuts Jupiter’s Tony Nutt from Wealth 150

Hargreaves Lansdown has cut Tony Nutt’s £2.45 billion Jupiter Income and £559m Jupiter High Income funds from its list of recommended funds despite signs of a performance turnaround.

Tony Nutt
Tony Nutt

The firm says Nutt’s stock seletion has been “inconsistent” since the financial crisis struck in 2008 and has cut it from the Wealth 150 list.

The move is a blow for the manager who was among the Britain’s most popular until he was unable to keep up with peers when markets rebounded after the financial crisis.

High exposure to oil major BP exacerbated the performance woes this year following the disaster in the Gulf of Mexico. (article continues below)

His flagship Jupiter Income trust ranks 97th out of 103 funds in the Investment Management Association (IMA) UK equity income fund sector after delivering just 7.2% over the past year.

“We do not feel this short-term underperformance means that Tony Nutt is a poor manager”

But over the past three months the fund ranks 39th out of 104 funds with performance records over the period, after delivering 8.2% of growth.

Meera Patel, senior analyst at Hargreaves Lansdown, says: “Our analysis suggests that the primary cause of the underperformance is that Tony Nutt’s stock selection within some areas of the market has been inconsistent, especially in the media sector.

“Even the best fund managers go through disappointing periods, and we do not feel this short-term underperformance means that Tony Nutt is a poor manager. His longer-term track record is excellent, and we firmly believe he possesses the skills to improve returns.

“However, we would like to see a sustained improvement, driven by positive stock selection, before suggesting clients invest any more money in either fund. We would stress that this is not a recommendation to sell the funds.”