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UK funds suffer their biggest fall since 1990

Three-quarters of UK funds suffered double-digit falls this year as accounting scandals, terrorist activity and the threat of war in Iraq took their toll on stockmarkets, says Lipper.

In the 11 months to the end of November, 1,335 out of 1,804 funds -74 per cent – lost more than a tenth of their value. Of the funds that fell in value, 18 per cent dropped by a quarter.

The average fund was down by 12.22 per cent – the worst performance since 1990 when falls averaged 17.26 per cent.

Only 14 per cent of all funds delivered a positive return, while the remaining 12 per cent fell by less than 10 per cent.

No IMA sector invested in equities delivered positive growth, with equity funds losing 19 per cent on average.

The worst-performing fund was Exeter&#39s high-income fund, which plunged by nearly 65 per cent, while the bottom-ranking sector was TMT, which fell by 42 per cent, leaving it almost 80 per cent down since March 2000.

Property was the top sector, returning 5.5 per cent, followed by index bear (4.86 per cent) and UK gilt (4.38 per cent).

Lipper research manager Brian Harvey says: “Recent rallies in the UK unit trust and Oeic universe in October and November of on average 2.15 per cent and 3.36 per cent respectively were not enough to erase many of the big monthly falls in 2002.”

Michael Philips proprietor Michael Both says: “It shows why the FSA should stop blaming IFAs for everything and look at the poor performance of fund managers.”


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