City heavyweight Terry Smith founded Fundsmith a decade ago, and its equity fund has produced a 270% return in nine years and is now the largest in the UK at around £16bn.
Despite this, Smith has been left out of The Hargreaves Lansdown Wealth 50 this time around.
The Wealth 50, previously the Wealth 150, is regarded as the most powerful buy-list in the asset management industry. It is sent to Hargreaves’ 1.1mln private investors, many of whom act on the advice.
An angry Smith told The Times: “Hargreaves Lansdown’s recommended funds continue to be chosen mainly for fund managers’ willingness to comply with a charging structure which enables Hargreaves Lansdown to maximise its own profitability, and not because they perform well for investors.”
Hargreaves investment director, Mark Dampier, denied that Smith had been left off the list because of a refusal to reduce fees.
“Fundsmith is a very good fund,” he told The Times. “But on our list we have included Lindsell Equity Global Equity, run by Nick Train. He has done as good or even better job than Terry Smith, and runs his fund with a very similar style.”
Apart from Smith’s omission, another big surprise was the inclusion of Neil Woodford.
The embattled star fund manager left Invesco Perpetual to set up his own company in 2014 to much fanfare, but the fund has struggled over the past three years, leaving investors, on paper at least, in the red.
“The easy thing would be to take [Woodford] off the list,” said Dampier. “That would actually be less hassle for us. We are long-term conviction investors.”
Shares in FTSE 100-listed Hargreaves were down 0.3% to 1,900p in late-afternoon trading on Wednesday.