Research carried out by investment platform FundExpert.co.uk showed that £269bn of private investor money is in funds that were ‘mediocre at best’.

The analysis was based on in-depth analysis of 120 separate periods for every fund with at least a 10 year track record. The report found that only 70 out of a total universe of more than 750 funds consistently prove they can deliver over the longer-term.

Brian Dennehy, founder and managing director of FundExpert.co.uk, said: “While it would appear the vast majority of fund managers aspire to mediocrity our latest analysis shows that many don’t even manage to achieve that. For many thousands of private investors that buy and hold funds for long periods of time, this means a totally unacceptable level of underperformance they shouldn’t be prepared to put up with.

“We can’t change the fund management industry overnight, it is what it is. But private investors can change their investment outcomes by taking more responsibility, and monitoring their funds in the certain knowledge that there is, in most cases, considerable room for improvement.”

FundExpert.co.uk, which has introduced a new fund rating service on the back of its findings, is urging private investors who typically buy and hold funds for long periods of time to review their holdings and move their money into one of the 70 funds it has awarded ‘Vintage’ status.

The report showed that £31bn invested into popular investment sector, UK All Companies, is invested in what the platform calls ‘ugly’ funds. These funds consistently underperform their peers.

Over a 10 year period, these funds returned 102%. In contrast, investments into ‘vintage’ rated funds grew by 209%.

Even the ‘mediocre’ funds, which the platform says should also be avoided, returned 71% less over 10 years.