£100bn down the drain of reputed fund-houses: report |
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Sat, 02 Apr 2005 01:00
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Investors are going to rue the day they put their money in funds such as Abbey Life, Fidelity’s Global Equity Fund, Lincoln’s property Fund and Scottish Equitable’s Global funds. A study ‘Funds That Consistent Fail Investors’ initiated by Investor Connections has revealed the names of funds that have performed poorly or abysmally over the last five years.
Many of these funds are managed by companies that are household names, such as Scottish Equitable, Norwich Union, etc. The results come as a huge surprise for the large number of investors and particularly for Investor Connections who tracked the performance of all funds over the last five years. The list of poor performers shows 25 investment trusts, 34 insurance funds, 76 unit trusts and open-ended investment companies and 98 pension funds.
| Usually in such surveys one comes across maybe one or two or maximum a handful of such poor performers. To find such a huge number suggests an abysmally poor ability to making money at the bourses. The additional shocker was the total of £100bn which makes the loss unforgivable. Investors might as well have blindfolded themselves and traded in equities by pointing their finger on any stock.
The bigger shock came from the £120bn managed pension fund sector: 98 pension funds have disregarded your concern about your future and neglected your investment. From this entire sector, £40bn-worth of funds yielded much less then their peers.
Market analysts insist the results were only to be expected as most fund houses today can be accused of mismanagement. A senior analyst said “They simply have no strategy. These are times when the global markets are opening up and indices on an average move upwards consistently. Fund houses should be able to give better returns or at least protect their position. A reasonably good fund manager would be able to plot a healthy portfolio of investments. Strategy is as important for fund managers as making a well-informed choice is for investors.
Among the "truly abysmal" funds were Scottish Equitable’s Global and European pension funds, Fidelity’s Global Equity fund and Lincoln’s Property fund. These really take the cake for bungling.
Scottish’s Widows appears to have a spot for the low marks. Earlier it had topped Bestinvest’s Spot the Dog, a similar survey that had identified £1.5bn-worth of failing funds. It is surprising how many people still have faith in this brand. It’s time to question your faith in such fund houses or else you may have to say goodbye to your investment. Next time you go to an investment house ask for a list of best and worst performers tracked over the last five years. This should help you take a safer decision.
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