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Woodford fund named worst performer after nightmare year

Neil Woodford’s flagship fund was first shamed by Bestinvest a year ago.

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Funds must have under-performed for three years running to end up on Bestinvest’s Spot The Dog list (Dominic Lipinski/PA)

Funds must have under-performed for three years running to end up on Bestinvest’s Spot The Dog list (Dominic Lipinski/PA)

Funds must have under-performed for three years running to end up on Bestinvest’s Spot The Dog list (Dominic Lipinski/PA)

A fund formerly run by investment manager Neil Woodford has been named the worst performer in the UK as Invesco dominated a list of the poorest funds to invest in.

An investor who put £100,000 into Mr Woodford’s flagship Equity Income Fund three years ago would only get £66,000 back today, according to research from Bestinvest.

The fund, which has rebranded as LF Equity Income since coming under new management, is set to be wound up this year.

It was first slapped with a “dog” label by Bestinvest in its biannual Spot The Dog report a year ago.

Months later, the fund was forced to suspend withdrawals as investors tried to take their cash out too quickly.

Jason Hollands, managing director at Bestinvest, said: “The fund makes its final appearance in Spot The Dog in this edition, under the banner of LF Equity Income … While this has been a shocking and highly unusual saga, it is an important reminder of how incredibly important it is to regularly review your investments and to potentially make changes.”

Meanwhile, Invesco was the worst repeat offender on the list, with 11 of its funds being caught in the net. They have £13 billion in total assets, 30% of the list’s value.

Invesco has been approached for comment.

It is all too easy to assume that the managers of your investment funds must be doing a great jobJason Hollands, Bestinvest

To end up in the net, funds must have given investors worse returns than the market they invest in for each of the last three years, and under-perform by 5% after fees over the whole three-year period.

This month’s report caught 91 funds, a big increase from 59 six months ago. They have £43.9 billion in total assets.

Funds managed by JP Morgan, Hargreaves Lansdown and Artemis are also on the list.

Mr Hollands added: “2019 was overall a fantastic year for stock markets across the globe, providing investors with double-digit returns.

“In such an environment it is all too easy to assume that the managers of your investment funds must be doing a great job. However, in many cases the returns enjoyed have had little do with the decisions taken by fund managers and they may be substantially lower than the gains delivered by overall markets.”

PA Media