Last week Money Marketing revealed that Barclays advised clients who were approaching or in retirement to transfer their long-term savings into the specialist fund.
The fund has fallen 45 per cent in the 12 months to March 2009.
Responding to questioning from Money Marketing, Barclays has revealed it categorised the fund as balanced in error after a new framework for assessing risk was introduced at the bank.
In July 2007, Barclays says it reviewed and categorised all of its third party funds in accordance with the new framework.
Barclays says: “Due to an error, the Aviva (previously Morley) global balanced income fund was categorised into our new balanced category, rather than our new adventurous category, where it should have been placed.
“This error was identified in November 2007 and we proactively contacted all affected clients to sort it out, providing them with several options moving forward.”
Barclays insists that it calculated the amount each individual’s investment had underperformed against a benchmark equivalent for a balanced fund and offered to restore investors to the position they would have been in had they been invested in a balanced fund.
Barclays also says it offered investors information about alternative funds and withdrawing their investments at that time.
However the investors that have contacted Money Marketing insist they were never compensated for any loss, or informed of the classification error.