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Have British fund managers become a pointless expense for investors?

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The Jupiter UK Growth fund also featured in the top 10. It has fallen behind its benchmark by 24 percentage points, the worst performance in the “UK all-­companies” sector.

Jason Hollands, of Bestinvest, said that while short periods of weakness might be forgiven, persistent underperformance should ring alarm bells.

“There can be more concerning factors at work, such as changes in the management team or a fund becoming too big, which might constrain its flexibility, or a manager straying from a previously successful approach,” he said.

A spokesman for Lloyds Banking Group said: “We continue to take a long-term approach to investment management and we work continuously to improve performance across our entire fund range.”

A spokesman for Jupiter said: “We have made changes to the teams of the funds listed and it is our expectation that these actions should improve future outcomes for our clients.”

Overall, the worst performer was the £39m FTF Martin Currie Global Unconstrained fund, which has fallen 34 percentage points behind the global stock market.

A spokesman for Martin Currie said the underperformance was due to a recent change in investment style in favour of high-quality “growth” stocks, which have sold off this year, and away from cheap “value” stocks.

Just 12pc of the managers of UK-focused funds beat the FTSE 100 in the first half of this year, according to a separate report from the broker AJ Bell. The average UK fund lost 14pc, against a drop of 4pc in a passive fund.

Robin Powell, an investment fees campaigner, said: “Fund managers have told us for years that it is in times of volatility that they offer the most value. Yet in one of the most volatile trading periods in recent market history, they are largely underperforming.”

Mr Powell said UK-focused fund managers typically had a bias towards small and medium-sized companies, which exacerbated their underperformance.

“Smaller companies tend to have a better long-term growth story, which is why fund managers buy them,” he said. “But these stocks suffer more during periods of economic uncertainty.”

Mr Powell advised DIY investors to take a more “passive” approach to their portfolio and pick funds that tracked the market instead of paying a manager to try to beat it.

For example, if a saver had invested £10,000 a decade ago in the HSBC MSCI World ETF, which mimics the global stock market, it would now be worth £34,035. By contrast, if they had invested in an average actively managed global fund, they would now have £27,934 – or £6,101 less.

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