Are your investments performing badly?Posted on: 21 June 2011 by Peter McGahan
60% of investments are performing badly - are yours amongst them?
As an investor, you want to choose the best for your investments. It's certainly not an easy task. In a recent report, it was revealed that there are close to £26 billion in under performing funds (1). Couple that with the information that there are 285 funds in the UK all companies sector (2) almost 200 of which are under performing, and you have a rather disappointing picture.
But how to know if your investments are among the over or the underperforming?
To go back to basics for a moment, it's worth a reminder of what exactly a fund is. Simply put, it's a range of stocks and shares and other assets such as property, cash, gold etc. Amongst the UK all companies sector are a huge range of companies, including some well known names. Having a well-known name, however, doesn't guarantee a good performance, as you'll see below.
Tracker funds are often seen as a way of getting the best from your investments. It's very likely that you have amongst your portfolio some tracker funds. It's possible that you've been told they are an inexpensive and less risky way to gain a return on your investments. They're a popular choice for many investors, but you should be aware that they might not be doing the best they could for your money.
If you have a tracker fund, it means that your fund 'tracks' an index, such as the FTSE 100. What you would think is that by tracking such an index, your investments would be performing to the same standard. Take a closer look at the market data, however, and you'll find that isn't always the case.
Looking at the performance of some well known companies and the tracker funds that they offer investors makes for interesting reading.
In the UK all companies sector (a sector being a group of funds with similar properties) there are 285 funds in total. Nearly all the tracker funds in this sector are currently underperforming the yearly average. The underperforming funds include some names you might be very familiar with.
None of Marks and Spencer's funds outperform the average and only one of JP Morgan's funds outperforms it. A few other names whose funds are not doing as well as you would hope, in that they are also underperforming, include Halifax, who has two tracker funds that underperform the average, and Barclays.
HSBC also has two tracker funds below average; AXA and Canada Life, both well known names, get a 'could do better' stamped on their report with funds several points below the average in the sector.
If this makes for worrying reading, then there are steps you can take to ensure you've got the best funds for your needs and that your investments are outperforming the rest of the field.
Speak to an independent financial adviser who can offer you truly independent investment advice, including the benefit of detailed and extensive research to find out exactly which are the best performing funds. We've mentioned some of the laggards above, but those doing well and making some returns well above the average include Standard Life, M&G and MFM Slater.
If you're paying a fee for your investment advice, that fee should provide you with the very latest research. At Worldwide, we make sure it does. Our research includes speaking with fund managers and looking at the relationship between risk and return, to make sure that a fund is not taking too high a risk with your money, for too little reward. They'll make sure you stay ahead and get the best returns possible from the best funds in the field.
Source (1) FundWeb
For a free factsheet on the best performing funds, call Worldwide on 0845 230 9876, e-mail firstname.lastname@example.org or take a look at our website www.wwfp.net.
The value of shares and investments can go down as well as up.
Worldwide Financial Planning Ltd are authorised and regulated by the Financial Services Authority. 'The FSA does not regulate Credit Cards, Will Writing and some forms of mortgage and Inheritance Tax Planning.'
Information given is for general guidance only, and specific advice should be taken before acting on any suggestions made.
All information is based on our understanding of current tax practices, which are subject to change.
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