Investments  

Worst performing funds of past three years revealed

Worst performing funds of past three years revealed

Fund managers Neil Woodford, his successor at Invesco, Mark Barnett, and a trio of funds run by St James's Place all featured among the worst performing funds of the past three years.

The data was contained in the "Spot the Dog" report, compiled by wealth manager Tilney, which was published on Saturday (February 9).

The research examined the funds that underperformed their respective sectors the most for three consecutive years, and that underperformed by more than five per cent for the whole of the three year period.

There were 111 funds that met these criteria at the end of 2018 with total assets of £54.6bn.

Mr Woodford’s Equity Income fund underperformed by 28 per cent in the three years, a time period during which the fund halved in size.

A representative of the company said the manager had tried to avoid "stocks whose share prices and valuations have risen on an increasingly false premise".

The St James’s Place UK High Income fund, which Mr Woodford also manages, also made the list with a three-year underperformance of 30 per cent. 

The £1bn St. James's Place Global Equity Income fund, which is managed by Manulife, meanwhile underperformed by 9 per cent, and the £860m St James’s UK and International Income fund, run by Artemis’ veteran fund manager Adrian Frost,  underperformed by 11 per cent in the three years.

St James Place has been approached for comment.

Mr Woodford’s underperformance also impacted on the Hargreaves Lansdown Income and Growth fund, a multi-manager fund, which has a significant investment in Mr Woodford’s products.

Jason Hollands, managing director at Tilney, said: "In each market the difference in return between the best and worst performing funds is huge.

"These differences in fortunes cannot be explained by variations in fees but come down to the decisions taken by the managers as to which companies to invest in. It is therefore vital for investors to choose their funds very carefully. 

"Once invested, it is essential to keep a beady eye on your investments and to check whether or not the funds you hold are adding value for the fees being charged as many simply do not."

He added: "Many investors will now discover that they’ve endured even worse absolute losses delivered by funds they have loyally held, where these have not managed to keep up with, or beat, the markets."

The twenty worst performers in the report are below: 

 

Fund

Size

(£ bn)

Sector

3 year under-perform*

1

Invesco High Income (UK) Z

£7.85

UK All Companies

-19%

2

LF Woodford Equity Income C

£4.98

UK All Companies

-28%

3

Artemis Global Income I

£3.90

Global Equity Inc.

-16%

4

Invesco Income (UK) Z

£3.44

UK All Companies

-19%

5

Threadneedle UK Z

£2.04

UK All Companies

-7%

6

Janus Henderson European Selected Opps I

£1.93

Europe ex UK

-7%

7

St. James’s Place UK High Income L

£1.68

UK Equity Income

-30%

8

HL Multi-Manager Income & Growth A

£1.26

UK Equity Income

-11%

9

M&G Dividend I

£1.15

UK Equity Income

-15%

10

St. James’s Place Global Equity Income L

£1.06

Global Equity Inc.

-9%

11

Jupiter UK Growth I

£1.06

UK All Companies

-28%

12

Threadneedle European Z

£1.05

Europe ex UK

-10%

13

MI Somerset Emerging Markets Dividend Grth A

£1.02

Global Emerging Mkts

-14%

14

Invesco UK Growth (UK) Z

£1.00

UK All Companies

-7%

15

Aviva Investors UK Equity Income 2

£0.92

UK Equity Income

-8%

16

HSBC UK Growth & Income C

£0.89

UK All Companies

-13%

17

St James's Place UK & International Income L

£0.86

Global Equity Inc.

-11%

18

Standard Life European Equity Income P1

£0.84

Europe ex UK

-9%

19

Janus Henderson Global Equity Income I

£0.78

Global Equity Inc.

-10%

20

Schroder UK Alpha Plus Z

£0.76

UK All Companies

-8%

*This is the extent to which the fund has delivered a lower return over the three years to end 2018 than the market in which it invests (after fees). 

david.thorpe@ft.com