Investments  

In the Redzone: 162 funds struggle to keep up

Despite this, McDermott described Aberdeen’s movements as a “turnaround”.

He said: “ASI has, thankfully, continued its turnaround. The group is joint ‘top’ with Schroders, but assets under management in the Redzone are now down to less than £2bn.”

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Iain Pyle, manager of the ASI UK High Income fund, said: “The fund targets a higher yield than the average equity income fund [...] so it naturally had exposure to some higher yielding, but higher risk, parts of the market in the early part of 2020.”

Meanwhile Thomas Moore, the manager of the ASI UK Income Unconstrained fund, said macro-dominated markets had created challenges for the portfolio’s bottom-up, non-consensus approach.

A Schroders spokesperson said: “We recognise that there will be periods of underperformance given where we are in the market cycle and the significant impact of the global pandemic.

"We remain confident that our strategies will perform for our investors over the long term."

JP Morgan, Invesco and UBS made up the five worst in terms of number of funds in the zone, with five funds each making the list.

But the worst offender in terms of assets was in fact Franklin Templeton — its giant Emerging Markets Bond and Global Bond funds, with some £9bn of assets between them, were both placed in the Redzone.

McDermott said there was good news regarding the general direction of travel for investors as more pressure piled on asset managers regarding value for money.

He said: “With value for money statements now mandatory for all fund management companies, the further good news is that consistently underperforming funds were now likely to be addressed in a timelier manner.

“We’ve already started to see some companies consolidate their ranges and look to provide a better investor outcome.”

All asset managers mentioned were approached for comment.

imogen.tew@ft.com

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