The £1.89m SF Webb Capital Smaller Companies Growth fund remains on top of the Chelsea Financial Services RedZone list of underperforming funds, with Aberdeen Asset Managment having the most funds on the list.
The £228m First State Global Resources was the second worst performing fund, underperforming the average sector by 69.17 per cent in the past three years.
Chelsea managing director Darius McDermott says: “First State Global Resources has been hit by the slump in oil price and commodities in general. Sitting as it does in the wider Global sector, the underperformance is magnified considerably.”
The Redzone has some 143 funds with total assets of almost £48.5bn which posted third or fourth quartile returns in the past three years, consistently underperformed the sector average and their benchmarks. Around 20 of these funds, representing £19.77bn in assets, are passive.
Aberdeen Asset Managment remained the asset manager with the most funds on the list, at seven, while BlackRock had the most assets in the list with £10.64bn in the RedZone, most of which (£8.46bn) is invested in the UK Equity Tracker. M&G comes second in the list with £7.87bn and L&G third with £7.37bn.
The worst perfoming passive fund was the Families Charities Ethical, whic underperformed the FTSE4Good UK 50 Index benchmark by 9 per cent.
The UK All Companies Sector had the most poorly-performing funds in the list at £26.82bn among 34 funds.
Mixed Investments 40-85% shares was next with £2.94bn and 16 funds, followed by Flexible Investments with £4.15bn across 12 funds.
There were new entrants to the top 10 list, including the Troy Trojan fund, which McDermott says was “the biggest disappointment”.
”The manager, Sebastian Lyon, has been extremely bearish in recent years and currently has around 20 per cent in cash and 10 per cent in gold bullion, which has really hurt the fund,” says McDermott. ”He is convinced a market slump is imminent, however, and the portfolio is positioned to cushion against this occurrence. I wouldn’t write the fund off just yet – the manager has an outstanding long-term record and may yet be proved right – but it’s one to monitor closely.”