A Staggering £78 Billion Held in Just 10 Underperforming Investment Funds
- 2714 funds analysed for performance & sector ranking
- This report details the 10 most popular funds that have underperformed
- Over 7% of investor savings held in these 10 funds
UK Investors have access to thousands of investment funds managed by over 100 fund managers. Yet despite the wide range of fund options available, a significant proportion of money invested is held within a small range of funds that are managed by large fund management brands, and are in fact underperforming.
To identify the most popular funds among consumer investors that have performed comparatively poorly, we analysed the performance and ranking of 2714 unit trust funds. In this report we list 10 of the most heavily invested funds that are simply not delivering for their investors.
Combined the 10 funds within this report hold a staggering £78 Billion of our savings.
Standard Life Investments Global Absolute Return Strategies
The Standard Life Investments Global Absolute Return Strategies fund holds a colossal £25.8 Billion of investors’ savings, making it the most heavily invested fund from the 2714 funds analysed.
This fund is 1 of 72 main unit funds in the UT Targeted Absolute Returns sector that have at least 1 year’s performance history. Over the most recent 12 months this fund ranked 56th in its sector for performance with negative growth of -1.58%. Over the recent 5-year period this fund performed worse than 57% of competing same sector funds with growth of 17.02%.
Invesco Perpetual High Income
Holding over £11.3 billion, the Invesco Perpetual High Income fund was the 3rd largest fund from our analysis. Despite being heavily favoured by investors this fund has struggled for consistency within its sector with its sector ranking fluctuating over the recent 5-year period. However, over the 12 month period up to 3rd February 2017, it has struggled for performance and ranked 262nd out of 276 same sector funds with growth of 6.13%. In comparison the top-performing same sector fund during this period delivered growth of 74.27%.
CF Woodford Equity Income
Neil Woodford is a highly publicized and popular fund manager and his UK Equity Income fund has been a favourite among investors since its launch in June 2014. Holding over £9.3 billion it is currently the 6th most heavily invested fund out of the 2714 funds analysed. Despite a strong start, this fund has suffered declining performance and has fallen down the rankings in its sector. Over the most recent 12 months the Woodford Equity Income fund ranked 84th out of 90 main unit funds in the UK Equity Income sector with disappointing growth of 5.78%. Despite its recent rocky performance investor trust has stayed strong as remains one of the most popular fund options among UK Investors.
Baillie Gifford Diversified Growth
The Baillie Gifford Diversified Growth fund sits within the diverse and highly competitive ‘Specialist’ sector alongside 92 other funds with at least 5 years performance history. This fund currently holds £6.4 billion of client money, which is the 12th largest out of all 2714 funds analysed for this report. It is another fund that has consistently struggled for competitive performance within its sector. Over the recent 12 months this fund achieved growth of 9.49% and ranked 103rd out of 126 funds in its sector.
Invesco Perpetual Income
The Invesco Perpetual Income funds Is the 2nd of 3 Invesco Perpetual funds to make this report and similar to the Invesco Perpetual High Income fund it is managed by Mark Barnett and sits within the UK All Companies sector. Although they are both individual funds, they share similar objectives and pricing, with both following a similar performance path. However, the Invesco Perpetual Income fund has delivered slightly lower returns. Over the recent 12-month period this fund ranked 269th out of 276 same sector funds with comparatively low growth of 4.93%.
Invesco Perpetual Corporate Bond
The 3rd and final Invesco Perpetual fund to make our list of 10 largest underperforming funds is their Corporate Bond fund. This fund currently holds just over £4.9 billion. It adopts a relatively cautious approach in comparison to other same sector funds and as a result its performance has been comparatively low. Over the recent 3 years in particular this fund has ranked among the lowest performers within its sector with 3-year growth of 11.37%. In comparison the top-performing fund during this period achieved growth of 32.71%.
M&G Property Portfolio
Holding over 3.98 billion of investment, the M&G Property Portfolio is the largest fund in the Property sector and the 28th largest fund from our analysis of 2714 funds. Despite its size and popularity, this fund has consistently underperformed. Over the recent 5-year period it was outperformed by 83% of funds in the Property sector and over the recent 12 months it was the worst performing fund in the entire sector.
AXA Framlington UK Select Opportunities
Among the most popular funds with UK Investors is the AXA Framlington range. Their UK Select Opportunities fund currently holds some £3.8 billion and similar to the Invesco Perpetual Income and High Income funds, it sits within the UK All Companies sector. This is another fund to have consistently underperformed and with recent 1-year growth of 10.21%, it ranked 244th out of 276 funds in its sector for performance. Despite its recent performance being slightly better than both Invesco funds, it has been a more volatile fund and when analysed over a 5-year period it was outperformed by both Invesco funds and 60% of all other funds in its sector.
Troy Asset Management - Trojan
Holding £3.7 billion, the Troy Trojan fund is the largest in the Flexible Investment sector. Since its launch in 2001 the Trojan fund has been among the best performers within its sector, but in comparison to all other same sector funds it has struggled over the recent 5-year period. Between February 2012 and February 2014, the Trojan fund has negative growth of -3.18%, in comparison, the sector average during this period was 17.75% and during the 5 year period up to 3rd February 2017 the Trojan fund was outperformed by 94% of same sector funds.
Dimensional Global Short Dated Bond
The Dimensional Global Short Dated Bond fund holds over £3.5 billion and has consistently under performed within its sector (Global Bonds Sector). Over the recent 5-year period up to 3rd February 2017, this fund has consistently performed worse than 91% of same sector funds. Although this fund has a more defensive approach than other funds in its sector its performance has still been disappointing.
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The funds listed in this report are among the most favoured and heavily invested funds in the UK. Despite their popularity, during the recent 5 year period they have factually underperformed and have delivered comparatively poor returns in comparison to competing same sector funds.