UK and international wealth management specialist Tilney has more than halved the number of funds it holds in its portfolios to around 30, down from 70.
The London-based wealth manager said that within the funds that it manages for clients, it had recently culled about 40 funds from its portfolios.
It had also significantly downsized the number of funds to which it applies advance screening for selection from 500 down to just 130 a year ago.
Tilney said that the reduction in the number of funds was partly down to the company merging with two other firms, Towry and Ingenious, but was also due to many equity fund managers failing to outperform the benchmark.
Chris Godding, chief investment officer at Tilney, speaking at an event held in London that International Investment attended earlier today, where he was outlining the company’s market outlook for 2018, pointed out that the number of active fund managers that are able to regularly outperform is an increasingly select group.
“It is difficult for active fund managers to outperform the market, and so not many do that,” he said. “Because not many do it, it is easy to spot the ones that do, so we have concentrated the assets into those portfolios.”
Godding cited Baillie Gifford Japan and AXA Framlington UK Smaller Companies as good examples of funds that he continues to select in the portfolios.
The majority of the funds in which the Tilney portfolios are invested are run by managers significantly invested in the mandates themselves, and all are concentrated portfolios, he added.