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£18Bn funds in Chelsea’s drop zone

A massive £18.4bn of assets now sit in underperforming funds, according to the latest Chelsea Financial Services relegation zone.

The research shows assets in underperforming funds leapt by 39 per cent from September 1 to December 31, up from £13.2bn in the four months to August 31.

The company says there is increasing underperformance over a number of larger funds, as well as poor correl-ation between underperformers and outflows of money.
The £2.31bn Halifax FTSE all share IDX tracker fund is the biggest fund in the list, closely followed by the £2.27bn Prudential UK growth fund and £1.7bn Halifax international growth fund.

Chelsea decides which funds make the list through a quantitative screening process looking for funds that are third or fourth quartile each year for three consecutive years.

The number of underperforming funds in the list now stands at 86, up from 85 in the last report.

Scottish Widows/Swip again has the most underperformers with eight funds, which make up a total of 21 per cent of all the assets in the relegation zone.

The biggest underperformer is the UBS absolute return bond fund, which has a 58.24 per cent negative devi- ation from the sector average over three years.

This is followed by the MFM tech- invest special situations fund and the SVM global opportunities fund, which are down by 46.11 and 31.06 per cent respectively.

PSigma income fund manager Bill Mott is the biggest name to enter the list. Mott’s £452m income fund is currently fourth quartile over three years having returned 0.1 per cent, compared with the average return of 7.7 per cent in the IMA cautious managed sector.

Chelsea Financial Services managing director Darius McDermott says: “We are seeing a lot of the high-street banks producing large funds, thanks to their distribution and it appears people are not as concerned about their performance and switching out as they would be in the retail fund market.”



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There is one comment at the moment, we would love to hear your opinion too.

  1. This article proves it is VITAL to review your investments regularly, switching if necessary out of these underperforming funds.
    There is widespread neglect, particlularly from those without an active relationship with an adviser, and a growing need for more online information. was set up to address these issues, and to keep investors informed on the true performance of their investments.

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