AUM falls but no of underperforming funds rises

Speaking on the launch of the firm’s RedZone list of funds that aims to identify the worst performing funds over three years, Darius McDermott, MD at Chelsea Financial Services said while the fall in funds under management was encouraging: “there are still 156 perennially underperforming funds on the list – this is far too much investor money underperforming for far too long.”

While the number of funds rose, the fall in AUM was in part helped by the departure of the the BlackRock UK Equity Tracker Fund from the list

Aberdeen Asset Management is the owner of the largest number of underperforming funds, at 10 in total across a number of sectors, with the next closest firms, HSBC, Jupiter and Santander with five each.

But, while the number of funds has increased over the three months, the view at the bottom of the table remains fairly consistent with the three worst performing funds the same as three months ago.

The SF Webb Capital Small Companies Growth Fund, produced a return 106.25% worse than the sector average, CF Lacomp World Fund has returned 42.23% less than the sector average and the FP HEXAM Global Emerging Markets Fund 39.76%.

However, as McDermott told Portfolio Adviser in October: “To be fair, the incumbent manager was on the receiving end of a hospital pass, in the form of a portfolio of stocks that were hard to sell, and performance has got progressively less bad over the past two years, but that will be of little comfort to anyone who invested, and lost, the majority of their money.”

And, to that point, the fund has been performing less poorly than in previous months, he added.
Once again the UK All Companies Sector plays host to the largest number of underperforming funds, 33. The Global Sector is home to 14 funds, while the mixed investment 20%-60% and 40%-85% shares sectors host 11 apiece.

Based on three-year cumulative performance.
All data sourced from FE Analytics