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&#39£8bn in underperforming funds&#39

Hargreaves Lansdown has highlighted underperform-ance of Scottish Equitable pension funds in a wide-ranging review of the sector.

The report, Income-reducing Pension Funds, covers managed and UK equity funds.

It reveals that two Scottish Equitable funds – the UK equities pension fund and the mixed pension fund – measured over one, three, five and 10 years were both third or fourth-quartile performers consistently.

The two funds total over £8bn, with the equities fund holding £3.378bn while the mixed pension fund has £5.049bn. HL focuses on the ScotEq funds because they are by far the biggest of the poor performers.

The ScotEq mixed pen-sion fund performance is 4.97, -9.1, -14.65 and -47.2 per cent over one, three, five and 10 years compared with a sector average of 5.98, -4.6, -8.4 and 56 per cent. ScotEq&#39s UK equities fund has achieved 7.63,10.81, -17.39 and 61.56 per cent over one, three, five and 10 years compared with a sector average of 9.44, -8.24,13.59 and 68.73 per cent.

Hargreaves Lansdown head of pensions Tom McPhail says: “The amount of money involved, given the track rec-ord of performance, was grea-ter than expected.”

Scottish Equitable public affairs manager Tony Bons-ignore says: “The long-term mixed fund performance has been disappointing but we have taken positive steps to address this and we expect this to translate into better performance.”

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