News & media

News release 24 February 2006

£7.5 billion of investors’ hard-earned savings wasting away in dud funds

With more than £7,500,000,000 of investors’ hard-earned savings wasting away in ‘dud’ funds, Moneyspider urges investors to ignore this year’s ISA marketing hype and pay much more attention to the funds they’re already invested in.

With Spring all but upon us and the ISA season kicking in, funds ratings provider moneyspider.com is urging investors to review their current portfolios and to check whether their funds are ‘top of the pops’ or at the ‘bottom of the charts’.

According to new data from moneyspider.com, in the popular UK All Companies sector alone, more than £7,500,000,000 – yes, £7.5 billion - of investors’ hard-earned savings is simply wasting away in underperforming funds. That’s nearly £1,600 for each of the UK’s estimated 4.7 million ISA and PEP holders.

Consumers’ champion and moneyspider.com Managing Director, Bill Ross said:

“At this time of year, many investors have started to consider the funds they might choose to invest their ISA allowance, but that really should be their second priority.

“What investors should be doing, as a matter of urgency, is undertaking a complete review of their existing portfolio. Many investors have forgotten what they’re invested in, and more alarming still, simply don’t realise that their hard earned savings may be simply wasting away in some of the worst performing funds on the market.

“Take the UK All Companies sector, one of the most popular with investors. If you had invested £5,000 in the best performing fund, the Schroder UK Mid 250 Fund, five years ago, you would today be £5,662 better off than the investor who put his money in the S&W Nucleus Growth Fund, the worst performing fund – more than £5,000 better off.

“Whilst there are some ‘stand out’ stars in the UK All Companies sector, from groups such as Schroder, Fidelity and JP Morgan, the performance of other funds, from some of the biggest names in the industry - Scottish Widows being a prime example - is truly appalling.”

Top 5 ‘UK All Companies’ funds, as rated by moneyspider.com

Bottom 5 UK All Companies’ funds, as rated by moneyspider.com

Source: moneyspider.com/Financial Express, as at 5/2/06.

If you would like to discuss moneyspider.com in more detail, please contact:

Gordon Puckey
Phoenix Financial PR
Tel: 0207 947 2856
gordon@phoenixfinancialpr.co.uk

 Notes to Editors

 Moneyspider Limited

 moneyspider.com provides investment research and funds information to private investors, helping them to make independent and informed decisions. moneyspider.com operates independent of any fund management group.

The moneyspider.com service was launched in April 2004, with a choice of paper based and online registration. Over the last year, the registration process has been streamlined and simplified and is now available only online.

moneyspider.com neither advises on nor sells investments . moneyspider.com does assist with switches or purchases on an execution only basis, and rebates 50% of any initial commissions to the investor, the other 50% retained to cover administrative costs.

The service is provided to the investor at no additional charge, being funded by the annual renewal commission usually paid by fund managers to financial advisers.

moneyspider.com targets any investor with an ISA, PEP, OEIC or Unit Trust who isn’t receiving impartial information on the performance of their funds, who isn’t getting a good ongoing service from their IFA or who doesn’t have an IFA.

 Moneyspider Limited is an appointed representative of Anthony, Bryant and Company (Investment Consultants) Limited, which is authorised and regulated by the Financial Services Authority.

How does it work?

The Moneyspider Rating® monitors and ranks 2,000 Unit Trusts and OEICs, providing a ranking for all funds, and a 'Rank in Sector' rating for each fund, telling investors what the fund management companies won’t – how their fund holdings compare with their peers.   The Moneyspider Rating ® is produced by converting a sophisticated proprietary algorithm of 34 computations into a % score, calculated to four decimal points, which is then ranked into one of 5 easy-to-understand ratings - from A (highly rated)to E (very poorly rated). The Rating is calculated against a daily information feed, provided by financial services data collector and solutions provider, Financial Express.

The Moneyspider Rating® assesses the performance of each fund over 1, 3 and 5 years, comparing it with the FTSE100 and also how that capital sum would have done had it been held in cash (i.e. a secure deposit account).  It gives investors a current valuation on all the funds they hold, at the same point in time.

The Moneyspider Rating® provides a unique assessment of the performance of each fund measured against four parameters, each analysed over one, three and five years (weighted towards the longer term) as follows:

Sector ranking: comparison with all other funds in the same sector (based on the sector definitions used by the Investment Management Association).

All Funds ranking: comparison with all other 2,000 or so Unit Trusts and OEIC funds available to UK investors.

FTSE 100: comparison of the total return of the fund with the total return of the FTSE 100 index, providing a consistent benchmark for each fund.

Cash: comparison of the fund's performance with the return from an equivalent amount deposited in a 90 day access account.

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