Let’s get one thing straight: I call it as I see it. Sometimes people love what I have to say, other times, not so much. But I’m not here to win a popularity contest—I’m here to tell it like it is. Today, I find myself, somewhat reluctantly, on the side of St. James’s Place (SJP). Yes, you heard me right. Those so-called “dog funds” that everyone loves to bark about?
They’re not quite as flea-ridden as the critics would have you believe.
Now, I’m the first to point out when something stinks in the financial world, but I’m also willing to give credit where it’s due—even if it’s a grudging nod in SJP’s direction. The mud-slinging against them seems to miss a crucial point: the performance comparison exercises were made net of fees. And by fees, I don’t just mean the annual fund manager charges that everyone else seems to use as their yardstick. SJP’s net returns are, in fact, net of everything but the kitchen sink. We’re talking fund manager fees, platform fees, product fees, and yes, even those pesky adviser fees.
Let’s not gloss over this little detail: SJP, being the vertically integrated beast that it is, rolls everything into one all-inclusive charge. So when you see those supposedly dreadful returns, they’re already taking into account the full monty. Meanwhile, the so-called “not dog” independents? Their numbers only show fund manager fees, leaving the platform, product, and advice fees lurking in the shadows. And let’s face it, the typical ongoing advice fee of 1% that many advisers charge makes SJP’s 0.5% look positively charitable.
So, is this really a like-for-like comparison? Not in the slightest. It’s like comparing apples to oranges—except someone’s thrown in a banana and a pineapple for good measure. When you strip out the smoke and mirrors and compare all the fees involved, suddenly those SJP funds look a lot less dog and a lot more pedigree.
Now, I’m not saying SJP’s funds are top of the class. They’ve had their share of underperformers—yes, we know about the £10.7bn Global Quality Fund that’s been dragged through the mud for underperforming its benchmark by 27% over the last three years. But if you’re going to label a fund a “dog,” make sure you’re not just looking at the surface. Once you add up all the costs across the board, it’s not just the SJP dogs that start barking—some of those “not dog” funds might start yelping too.
Let’s give credit where credit’s due: SJP has taken some heat, but they’re not exactly hiding behind a wall of opaque fees. Yes, they’re all bundled together, but at least they’re upfront about it. Contrast that with some other fund houses, where you have to be a financial Sherlock Holmes to figure out what you’re actually paying for. And with the impending unbundling of fees in 2025, SJP’s transparency will only improve, making it easier for clients to see what’s really going on under the hood.
So, what’s the takeaway? Before you join the chorus of SJP detractors, consider whether you’re really comparing apples to apples. Because when you do, those supposedly scruffy “dog funds” might just look a little less mangy after all.
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