Moneyspider in the News

Dogs need to learn new tricks

The Observer

Why do some of the largest fund managers find it so hard to get their performance right? Two separate analyses last week underlined how many large funds languish far too long at the bottom of the performance tables. The first was prepared exclusively for The Observer by Moneyspider, a web-based service that helps investors rate the performance of their funds relative to others in the sector based on a range of objective criteria.

As the table below shows, some household names do very badly: Scottish Widow's, Abbey National and NatWest are among those who have only small proportion of funds - less than one in four in the case of Abbey - among the top-rated A and B grades. At boutiques like First State, Artemis and Rathbone's, at least eight out of 10 funds achieve that score. Perhaps the biggest surprise, however, is the ranking of Fidelity, which comes 49th out of the 58 firms in the table with less than 40 per cent of its funds achieving the highest rankings.

Best and worst funds

Ranking of fund groups by percentage of Moneyspider-rated A and B funds

Fidelity's underperformance is confirmed by Bestinvest's annual Dogs survey, which highlights those funds that have lagged their benchmark by at least 10 per cent for three years. Its UK growth fund has lagged the benchmark for the last six years which, as Bestinvest says, is 'gobsmacking' given the vast resources at the firm's disposal. Such poor returns, coupled with the imminent departure of star manager Antony Bolton from the remainder of its flagship Special Situations fund, means it is under severe pressure to demonstrate that is serious about improving its performance.

Scottish Widows' also features heavily in both tables. Its Global Growth fund is in the Dogs table for the ninth consecutive year and, Bestinvest calculates, its investors could have done three times better had they put their money in one of the best-performing funds in the sector.

These two tables underline the necessity of constantly checking the performance of your funds to ensure that they are keeping up with the rest. Most financial advisers offer this service. For those who prefer to do it themselves, Moneyspider's rankings are good and it offers regular alerts to ensure you keep on the ball.