Isa warning as Fidelity tops list of underperformers

24 February 2014

Fund management group Fidelity has topped a list of funds that have seriously underperformed in the last three years, according to Chelsea Financial Services.

There are 151 funds in the latest Chelsea 'RedZone', in which investors have ploughed almost £35 billion. Fidelity has the highest number of funds in the RedZone of any fund management group, with eight underperformers.

However, Chelsea said the worst-performing fund over the last three years is the SF Webb Capital Smaller Companies Growth fund, which has returned 112% less than the Smaller Companies sector average.

This translates to losses of almost 60% compared with average gains of 50% in the sector.

The Chelsea RedZone names and shames the worst-performing funds over the last three discrete years. It has been published at a time when hundreds of thousands of investors will be choosing which funds to invest their Isa money in before the tax year deadline of 5 April 2014.

Darious McDermott, managing director of Chelsea Financial Services, said: "It saddens us that the flagship Fidelity Multi Asset Strategic fund, managed by Trevor Greetham, stubbornly refuses to leave the RedZone, this being the third consecutive time it has appeared.

"It is also a shame to see Fidelity UK Growth, Fidelity UK Select and Fidelity European Opportunities, run by the veteran Colin Stone, on the list. Fidelity UK Growth was a serial offender for many years, before the current manager, Tom Ewing, took the fund on and managed to turn performance around.

"However, it seems it is once again hitting problems. Hopefully Fidelity will concentrate their efforts into getting their RedZone managers get back on track without delay."

A Fidelity spokeswoman said: “We are constantly looking to ensure our range of funds meet the needs of our investor base. Fidelity offers approximately 70 onshore funds covering a range of styles, geographies and asset classes.  
“While any underperformance is disappointing, with such a diverse range of funds some of our managers will go through periods of underperformance. Fidelity's range of funds offers investors a variety of styles and approaches which can be affected in the short term by the prevailing market environment but we aim to outperform the market in the longer term.
"This is a small number of funds in our OEIC range but we do take any underperformance very seriously and do everything we can to make sure our fund managers have the support they need, including access to one of the largest proprietary research teams."

CFS also operates a 'DropZone', which highlights funds from the RedZone that have underperformed their sector averages by the largest amount over the cumulative three-year period. Topped by SF Webb Capital Smaller Companies Growth fund, this list also includes Manek Growth fund and SVM Global Opportunities.

The Dropzone in full, along with how much they underperform their respective sectors, is as follows:

1. SF Webb Capital Smaller Companies, 112.11%
2. Manek Growth, 66.63%
3. SVM Global Opportunities, 47.69%
4. FP HEXAM Global Emerging Markets, 29.81%
5. CF Lacomp World, 29.41%
6. SWIP UK UK Opportunities 27.59%
7. Ignis UK Focus, 27.33%
8. F&C UK Alpha, 26.55%
9. WDB Assetmaster Global Thematic, 25.67%
10. Marlborough UK Primary Opportunities, 25.4%

Add new comment