Sometimes it's simply better to cut your losses and leave. That may have been the case for investors with money in the 10 funds listed below. These funds were the worst performers over the last five years out of 1,300+ UK-registered funds.
When looking at the list below, it’s clear that just because a fund has the word “growth” in its name, does not guarantee that investors will grow their assets. For example, both Manek Growth and Artemis European Growth have been particularly poor performers, with the funds losing 41% and 35%, respectively, over the last five years. Specifically, investors who put £10,000 into the Manek fund in 2001 would now only have £3,800 if they had stayed invested. This displays severe underperformance compared to Manek’s industry peers.
Below is the list of the worst performers over the past five years. Readers should note that while some of these funds posted decent gains in some years, overall their long-term performance was lacklustre compared to their industry peers.
Worst-Performing Funds
1. Rathbone Recovery Fund
48% cumulative loss over the last five years
2. Scottish Widows Investment Partnership UK Real Estate Fund
45% cumulative loss over the last five years
3. Manek Growth Fund
41% cumulative loss over the last five years
4. UBS UK Smaller Companies Fund
41% cumulative loss over the last five years
5. Neptune Green Planet Fund
41% cumulative loss over the last five years
6. Standard Life Select Property Fund
40% cumulative loss over the last five years
7. Aberdeen Property Share Fund
38% cumulative loss over the last five years
8. JP Morgan Global Financials Fund
37% cumulative loss over the last five years
9. SVM Global Opportunities Fund
37% cumulative loss over the last five years
10. Artemis European Growth Fund
35% cumulative loss over the last five years
Morningstar OBSR Analyst Rating: Bronze
Click here to read the Analyst Research
It is worth noting that while the Rathbone Recovery Fund posted poor performance over the last five-year period, it has actually performed very well over the last three years. Morningstar analysts point out that as of mid-July 2009, the "fund's investment strategy changed to the extent that its record prior to that date is not relevant to its new format."
Readers may also be puzzled by Morningstar's Bronze-rating for the Artemis European Growth Fund, but this rating shows Morningstar analysts believe the fund will redeem itself over time.
Analyst Muna Abu-Habsa explains why the fund received a Bronze-rating in her latest research report:
"Investors in this fund have undoubtedly been disappointed by its poor performance over the last five years. This largely owed to the thorough drubbing it received in 2008, its failure to capture much of the upside in 2009’s rally, and a poor showing in the second half of 2011. However, despite these losses we continue to believe the process and personnel behind this fund are capable of adding significant value over time. Indeed, the fund has outperformed its average peer by a wide margin since its launch in 2001, and it has delivered strong results in nearly all periods when we would have expected it to." Meanwhile, Abu-Habsa warns investors that this fund has a higher risk profile compared its its industry peers.
The 10 funds listed above were the worst performers out of 1,300+ funds over the last five years. Funds were considered only if they were available for sale in the UK, had share classes in pound sterling, provided regular performance data and had at least a five-year history. Furthermore, funds were only considered if they had a minimum investment limit that was below £10,000, ensuring these funds were more accessible to individual investors.
To learn about the 10 best-performing funds in the UK over the last five years, click here.
Investors should note that past performance is no guarantee of future performance within a fund or any other financial investment. Investors should conduct their own due diligence and research before making an investment decision.
