Published 28 September, the report showed that the number of funds in the Chelsea RedZone – a list of the worst-performing funds over three years – increased by 67% from 143 on 1 May to 239 on 1 September.
This also signalled a 109% rise in total assets represented on in the RedZone, up from £48.48bn to £101.52bn, which Chelsea FS said indicated consistent underperformance as opposed to sporadic periods of decline.
Of the RedZone funds, the top three biggest underperforming sectors represented 34.3% of funds overall and more than half – 50.51% – of total assets.
UK equity vehicles suffered the most, with UK All Companies the worst-performing sector overall, accounting for 44 of the funds and £36.63bn in assets. Of these, 27 were trackers funds with combined assets of £27bn.
Global was represented by 25 funds, totalling £6.97bn in assets, while UK Equity Income came third with 14 funds and assets worth £7.68bn.
However, across the Investment Association sectors examined during the study, just two averaged a negative cumulative performance during the past three years.
Global Emerging Market Bond fared the worst, turning in returns of -7.59%, followed by Global Emerging Markets with -4.87%.
Small caps enjoyed the best period of performance, accounting for the top four sector averages. UK Smaller Companies headed the pack with 62.21%, with European and Japanese second and third with 58.07% and 56.63% respectively, while North American Smaller Companies completed the top four on 52.35%.
In the Chelsea DropZone – the 10 worst-performing individual funds against sector average – there were some familiar faces from the May statistics.
