2001 UK Fund Performance Bleak

May 3, 2002 (PLANSPONSOR.com) - A new study of UK mutual fund performance shows how badly they were hammered during 2001, with only one out of 1,000 funds turning in a positive return.

Overall, according to the survey by WM, it was the poorest fund showing in a decade with an 8.9% drop, a report from IPE newswire said.

Nine out of ten funds, which collectively had £423 billion in assets, ended in the minus column with showings of -5% to -14.3%, according to WM.

The year also saw a flight from equities. The average fund followed by WM allocated 71% to equities at the beginning of 2001 – 48% to UK issues and 23% overseas. During the year, funds pulled out £3.5 billion, which brought down the overall equity average to 46%.
WM said that was the lowest it has been since the mid-1980s.

Monetary assets and index-linked assets now represent almost 20% of the average fund’s portfolio – more than double that of 10 years ago, WM said.

WM’s figures also show a considerable rise in allocations to overseas equities with an additional £12 billion committed during 2001.

Even after falling markets are taken into consideration, the allocation of 25% is the highest level recorded in the WM universe. American and Japan were the two greatest beneficiaries of this influx of cash.