Despite the fanfares that accompanied Guy de Blonay’s arrival at Jupiter, he’s had a very disappointing 12 months.

Initially appointed as co-manager of the fund, Jupiter talked up his ability to produce ‘outperformance for investors’, only for his former trainee to take over his old job as manager of Henderson Global Financial Opportunities and then thrash him.

Emily Adderson – tipped in What Investment's Financial Funds Survey last year (click here for link) – stunned her peers and silenced trade press critics after they all waited for her to fall on her face, as she wasn’t a ‘star manager’ as De Blonay had been labelled.

And, in their eagerness to pander to the Emperor’s New Clothes-beliefs that ‘star managers’ are always right, many of the trade press completely over-looked young Ms Adderson and their readers were the ones that missed out.

Those who invested in the Henderson Global Financial Opportunities fund for 12 months to the end May would have been £152 better off for every £1,000 invested.

In even simpler terms, those who invested with Adderson would have enjoyed 6 per cent growth on their investment over the year while those who invested with Jupiter’s de Blonay would have seen their cash shrink by nearly 10 per cent.

Now don’t get me wrong, Guy is a nice enough chap and he was only appointed as ‘lead manager’ of the Jupiter Financial Opportunities fund at the beginning of this year, so he was, perhaps, unable to influence decisions like he would have liked at the beginning, but the story of the recent underperformance is an interesting one.

Remember this is the manager who was once plastered across billboards to promote his fund and was the subject of TWO separate press releases announcing his arrival at Jupiter and his change in role.

So, what happened?
De Blonay’s notes holdings in Citigroup and Bank of America as positions which underperformed towards the end of last year when the US economy stated showing signs of weakness and the global market powered on.

As published economic data made things worse, he decided to close out the position. Also contributing to a miserable Q4 was an incorrect call on emerging markets. Having been pretty bearish in the first half of 2010, holding about 40 per cent of the portfolio in cash, de Blonay (and his then co-manager, Philip Gibbs) piled into high growth markets to catch up some of the underperformance.

This might have worked too, had an abrupt and painful correction not occurred in November as a result of an inflation-related scare.

As a result, the fund lost all the relative performance that the fund had clawed back from holdings in China, India and Brazil. Then, just when things looked like they couldn’t get any worse, the third part of the perfect storm– Sterling was surprisingly strong and affected the newly positioned holdings in Germany and Switzerland.

To his credit, de Blonay has gathered his portfolio together and has repositioned things since the start of the year. The fund still has a bit of exposure to China and to Russia.

India is starting to look more attractive too, according to the manager, although he doesn’t have any significant holdings there just yet.

He’s also diversified the portfolio into private equity (something which his former trainee Adderson did some time ago) and into life insurance.

Overall, de Blonay’s account of the past year is an honest and transparent one and he does have the good grace to admit that his former apprentice is ‘doing a great job’ and has ‘dedicated a lot of time into making her product right.’

But when asked whether he would give her his money to invest, he can’t quite bring himself to go overboard on the compliments.

He says, ‘I rarely give my money to other managers other than myself because I have no time to monitor the people managing my money.’ Fair enough.

However, for those that DO have the time to do so, he says, ‘retail investors should give their money to a fund manager now more than ever because it has become too difficult to spend 50 per cent of your time watching the market.’

That maybe so, but given the recent history, I think investors may prefer the hungrier, nimbler Adderson to look after their cash...... Well, for the immediate future, anyway.

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ENDS