UK equity funds have suffered their worst 12 months in more than a decade, with the average return for the year to April down to -21.3 per cent, according to fund research firm Lipper.
Lipper's research shows the year to the end of December 1990 was the last 12-month period to see an equi- valent fall, when equity funds were down by an average of -24.5 per cent.
Unsurprisingly, the worst-performing sectors – Japanese smaller companies, specialist and European smaller companies – are all dominated by technology stocks. But Japan-ese smaller companies has made a dramatic recovery over the last quarter to become the best-performing equity sector since January, with a negative return of just0.44 per cent.
The worst-performing individual funds over the last year are also technology funds, with Framlington Net Net producing the worst return at -73.57 per cent since last April.
The best-performing equity funds have come from a range of sectors, including UK equity income and UK all companies. The Govett US bear fund, which aims to perform the opposite of the S&P 500 index by using derivatives, has produced by far the best performance with a return of 55.24 per cent over the last 12 months.
With the exception of property, fixed-interest sectors have been the only funds to boast positive returns over the past quarter.
Lipper global marketing director Steve Lipper says: “Equity market declines have both contributed to and exacerbated a reversal in equity fund flows over the past 12 months. Almost all major fund markets have seen a shift from record equ-ity inflows a year ago to net outflows this year.”