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Ten serial underperformers to drop from your portfolio

Nick Paler
Written By:
Nick Paler

Investors in some of the UK’s worst funds have been urged to dump ten serial underperformers from their portfolios in a study by Chelsea Financial Services.

From time to time most funds endure a period of underperformance, but below Chelsea has identified the ten funds which have consistently lagged their peers by the widest margin over the last three years.

Names in its first ‘DropZone’ of 2013 include UBS’ £12m UK Smaller Companies fund, run by Frank Manduca. as well as Invesco Perpetual’s £31m Japanese Smaller Companies fund, headed by Osamu Tokuno.

Both funds are way behind the returns achieved by their sectors, lagging the average return by 44.13% and 26.82% respectively.

Juliet Schooling Latter, head of research at Chelsea, said: “It is extremely worrying that funds can underperform their peers to this extent.

“The only consolation this time is that investors in these funds don’t seem to need a referendum as to whether to stay in or get out. They are voting with their feet and assets under management in the 10 worst funds in the DropZone account for just £376.6m.”


The DropZone
Position Fund % underperformance from sector average
1st UBS UK Smaller Companies 44.13
2nd Close Special Situations 43.92
3rd IM HEXAM Global Emerging markets 33.02
4th Allianz Global Eco Trends 31.55
5th PFS Downing Active Management 26.93
6th Invesco Perp Japanese Smaller Companies 26.82
7th Barmac The Castleton Growth 26.42
8th PFS Prodigy Asia Emerging Markets 24.74
9th F&C High Income 23.94
10th Aviva Inv Property Investment 23.86