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Our review analysed 4,009 Investment Association funds, comparing their results against sector averages over 1, 3 and 5 years.
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30.1% of funds received a 1-star Yodelar Rating for persistently ranking in the bottom quartile of their sectors.
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The article highlights 10 funds that have consistently delivered weaker results than their sector peers across multiple timeframes.
- Only 7.1% of funds analysed achieved a 5-star Yodelar Rating for consistently ranking in the top quartile of their sectors.
Comparing the performance of funds to all other funds in the same sector is one of the most effective ways to measure how well investment funds and their managers have delivered over time. By assessing results over defined periods such as 1, 3 and 5 years, investors can identify the funds that have consistently added value and those that have struggled to keep pace with their peers.
While most attention is often given to highlighting the best-performing funds, it is equally important to recognise those that have persistently ranked among the weakest. Funds that consistently sit in the bottom quartile of their sector can restrict portfolio growth, particularly when stronger options exist within the same sectors.
Our latest review analysed 4,009 Investment Association (IA) classified funds, measuring their performance relative to sector averages. Each fund was assigned a Yodelar Rating to reflect how it performed compared with its sector peers. This analysis revealed that 30.1% of funds were rated as 1 star, reflecting consistent underperformance over the past 1, 3 and 5 years.
In this article, we focus on 10 funds that have each ranked among the worst in their sectors over 1, 3 and 5 years.
Sector Classified Fund Performance Summary
To identify the funds with the weakest performance history, we reviewed 4,009 Investment Association sector-classified funds, each assigned a Yodelar Rating based on how consistently it ranked within its sector across 1, 3 and 5 years. The analysis shows that the majority of funds received a low-performing 1 or 2-star Yodelar Rating.
Only 7.1% of funds achieved the highest possible 5-star rating, reflecting a track record of consistently ranking in the top quartile of their sector. A further 11.3% were rated 4 stars, while 19.4% held a moderate 3-star rating.
By contrast, most funds have struggled. 32.1% received a 2-star rating, indicating they frequently ranked in the lower half of their sector. In addition, 1,208 of the 4,009 funds analysed received the lowest possible 1-star Yodelar Rating, having consistently ranked in the bottom quartile across multiple timeframes.
How Yodelar Rates Fund Performance
10 Worst Performing Funds
From the analysis of 4,009 Investment Association classified funds, 1,208 received a 1-star Yodelar Rating for persistently ranking in the bottom quartile of their sectors. Below we feature 10 of these funds, each of which received a poor-performing 1-star rating.
Download The Full Fund Performance & Ranking Report
Each of these funds has struggled to match the returns of their sector averages over the past 1, 3 and 5 years.
Below, we provide an overview of each fund’s results compared with sector averages. The commentary highlights where performance has lagged and how each fund’s rankings have positioned it among the weakest in its sector.
Abrdn Asia Pacific Equity Fund
The Abrdn Asia Pacific Equity fund has consistently underperformed within its sector. Over the past 1 year it returned 10.69% compared with a sector average of 15.51%. Over 3 years it delivered just 1.78% versus 15.33% for the sector, and over 5 years it achieved 9.44% while the sector average was 28.68%. These results place it firmly in the bottom quartile of the IA Asia Pacific excluding Japan sector across all measured timeframes.
The fund invests across Asia Pacific markets outside Japan, including Australia, Hong Kong, Singapore and other emerging economies. Yet despite the region’s strong growth in recent years, it has struggled to keep pace with many of its sector peers.
Jupiter European Fund
The Jupiter European fund has also consistently underperformed comparative to its sector peers. Over 1 year it returned 3.94% against the sector average of 11.04%. Over 3 years it achieved 23.94% compared with 42.41% for the sector, and over 5 years it delivered 25.44% versus 56.98%. These returns have seen the fund rank in the bottom quartile of the IA Europe excluding UK sector consistently.
Liontrust Sustainable Future European Growth 2 Fund
The Liontrust Sustainable Future European Growth 2 fund has shown some of the weakest results in its sector. Over 1 year it returned 3.75% compared with the sector average of 11.04%. Over 3 years it delivered 12.75% versus 42.41%, and over 5 years it achieved only 3.90% compared with 56.98%. Its quartile rankings place it consistently at the bottom, including 119th out of 121 funds over 5 years.
The fund invests mainly in European equities using Liontrust’s Sustainable Future process. It carries the FCA’s Sustainability Focus label, requiring at least 70% in sustainable investments. This approach reduces the universe of companies available to the fund compared with broader European equity strategies, which could potentially hinder performance opportunities.
SJP Diversified Assets (FAIF) UT L Fund
This St. James’s Place fund has consistently ranked near the bottom of its sector. Over 1 year it returned 1.57% compared with a sector average of 8.78%. Over 3 years it delivered 11.37% versus 20.22%, and over 5 years it grew 24.67% compared with 37.27%. Its quartile position remains in the lowest group across all measured periods.
The fund holds a broad mix of assets including high-yield debt, loans, private credit and private equity, alongside cash and derivatives. While this approach is designed to give diversified exposure, results have fallen well short of sector averages.
True Potential 7IM Growth Fund
The True Potential 7IM Growth fund has also consistently underperformed sector peers. Over 1 year it returned 2.13% compared with the IA Global average of 10.29%. Over 3 years it grew 10.85% versus 27.75%, and over 5 years it returned 26.31% while the sector average was 56.57%. Across each period, it ranked in the bottom quartile of its sector.
The strategy combines a mix of underlying funds across equities, bonds and alternatives, but the allocations have not produced competitive results. With meaningful exposure to UK and US equities and other diversified assets, the overall blend has not kept pace with the stronger global equity strategies in the sector, leaving long-term returns well behind the sector average.
Fundsmith Stewardship Fund
The Fundsmith Stewardship fund has consistently underperformed the IA Global sector. Over 1 year it lost 3.04% while the sector grew 10.29%. Over 3 years it returned 10.73% compared with the sector’s 27.75%, and over 5 years it achieved 27.70% while the average was 56.57%. Rankings place it in the bottom quartile throughout.
The portfolio follows Fundsmith’s quality-growth approach but applies strict exclusions, avoiding sectors such as energy, mining, utilities and tobacco. This narrows the investable universe, and while the fund is concentrated in consumer and healthcare names, the results show it has struggled to match the performance of many of its sector peers.
Aegon Sustainable Diversified Growth Fund
This fund has been one of the weakest in its sector. Over 1 year it returned 4.60% compared with a sector average of 8.41%. Over 3 years it delivered just 4.32% versus 21.27%, and over 5 years it achieved 7.40% compared with 36.55%. It ranked at the very bottom of its sector over 5 years.
The fund holds a mix of equities, bonds and alternatives, but equity exposure is relatively modest. Over recent years, when equity markets delivered stronger growth, this balance coincided with results that fell well behind sector averages, leaving the fund ranked among the weakest in its sector.
True Potential Close Brothers Balanced Fund
This True Potential fund has also consistently underperformed comparative to its sector peers. Over the recent 1 year period it returned growth of 6.38% versus 8.41% averaged by the sector. Over 3 years it returned 17.01% against 21.27%, and over 5 years it delivered 20.85% compared with 36.55%. As a result, the fund has consistently ranked among the bottom quartile of the IA Mixed investments 40-85% Share sector.
Quilter Investors US Equity Small/Mid-Cap U2 Fund
The Quilter Investors US Equity Small/Mid-Cap U2 fund has also been among the poorest performers in its sector. Over 1 year it fell by 3.06% while the IA North America average grew 11.88%. Over 3 years it returned just 1.59% compared with 34.48%, and over 5 years it achieved 46.58% while the sector average was 76.09%. These results place it consistently in the bottom quartile of its peer group.
The strategy invests mainly in US small- and mid-sized companies, which in recent years have not kept pace with the larger US firms that have mainly been the main growth drivers in the sector. As a result, the fund’s returns have been well below those of most peers in the IA North America sector.
Premier Miton US Opportunities Fund
The Premier Miton US Opportunities fund has consistently underperformed within the IA North America sector. Over 1 year it lost 1.55% while the sector grew 11.88%. Over 3 years it returned 5.58% compared with 34.48% for the sector, and over 5 years it delivered 47.56% while the sector average was 76.09%. Quartile rankings confirm its place in the lowest group across each timeframe.
The portfolio is concentrated, usually holding 35–45 US stocks from the Russell 3000 index. Despite this focused approach, the fund’s returns have been well below sector averages. Its record of underperformance shows the wide difference in results that can occur between funds in the IA North America sector.
Summary
Our analysis of more than 4,000 Investment Association funds highlights the wide performance gap between those that rank strongly and those that remain at the bottom of their sectors. Only a small proportion of funds have consistently achieved top-quartile results, while a much larger number have persistently ranked in the lowest quartile across the periods assessed.
Importantly, many of the funds at the bottom of their sectors still produced growth, which can make it less obvious that they are underperforming. This shows why measuring results against sector peers provides essential context. Without it, weaker funds can appear competitive, when in reality they are delivering below-average outcomes compared with the wider market.
However, it is important to acknowledge that past performance is not an indicator of future returns. It provides useful context on how funds have behaved over defined periods, but it cannot predict how they will perform going forward.
Why Growth Alone Doesn’t Equal Good Performance
As this article highlights, simply seeing growth in a fund does not mean it is performing well. Many of the funds featured here have delivered positive returns, but when measured against their sector peers they have consistently been among the weakest. The same is true for portfolios - even when values are rising, they may still be held back by underperforming funds or unnecessary costs, poor diversification, or a lack of efficient risk management and portfolio rebalancing.
Portfolio underperformance is not always obvious, and without a clear comparison to sector averages it is easy to assume that results are satisfactory. In reality, the difference between an average fund and a top-quartile fund can compound into a significant gap in long-term outcomes. The most effective portfolios are those that are regularly reviewed, hold a genuinely diverse mix of assets, and are constructed using funds that have shown competitive performance compared with their sector peers.
A Yodelar Portfolio Analysis can help identify whether your investments are positioned in strong-performing funds or held back by those that consistently rank among the weakest. By understanding how your portfolio compares, you can make informed decisions and take meaningful steps to improve efficiency and long-term growth potential.
