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Half of top-quartile funds plunged below average

Over half of the funds in the top quartile at the start of 2008 failed to beat their sector average last year.

Money Marketing research, in conjunction with Financial Express, shows that of the 313 top-quartile funds between December 2004 and 2007, 160 produced third or fourth-quartile performance in their respective sectors last year.

Of the underperforming funds, six managed to lose more than 50 per cent of their assets, with JPM New Europe heading the list with a loss of 61.76 per cent.

Other funds which fell flat include Neptune Russia and Greater Russia, which lost 59.2 per cent while the SVM UK opportunities and New Star hidden value funds lost 55.19 and 54.98 per cent respectively.

Bestinvest analyst Tom White says: “There are various factors that investors may tend to overlook in the midst of a bull market. For example, a fund may be aggressively positioned and may get caught by things such as the mid and small-cap struggles.”

Hargreaves Lansdown investment manager Ben Yearsley says: “There were so many funds that made the small or mid-cap call and until 2008 that was the right call to make. It is more of a structural bias by them rather than a case of fund managers chasing the hot spot and getting burned.”


Single-tie annuity deals slammed

Annuity Direct director Stuart Bayliss has criticised providers’ single-tie annuity deals, saying they create bad value and damage industry progress on the open market option.

Once upon a sub-prime time…

Once upon a time there was a fairy tale about a whole nation that was so stupid that when they were told that the king was wearing fabulous clothes, although in fact he was naked, did not want to appear to be the odd one out and seem daft so they pretended to see these wondrous clothes.

Plan for a new life

Financial advisers have taken plenty of stick over the years. Much of it has been unfair but I have to say that some of it has been warranted and deserved.


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