Investment CLINIC
192 of 282 The ranking of the L&G UK Select Equity fund among its fund group
I have investments and each year am sent a statement outlining their performance, but have no idea how well they’ve done. how can I tell?
J. C., by email
YOU are invested in a selection of funds, so the best way to judge if they are serving you well is to compare them with their rivals.
Let us take for an example the L&G UK Select Equity fund in which you have money. The best place to start is on its latest factsheet. Using a fund analysis website, such as Trustnet, is very helpful, too.
The fund is in the UK All Companies sector, which has 282 funds in it. Over the year, your fund is ranked 192nd; over three years it is 163rd, so it’s holding steady in the middle of the group.
Over the past year the fund is down 2.5 pc. But the average for the sector is a return of 1.2 pc. Over three years it has returned 31.6 pc, compared with an average 36.5 pc among its rivals. So it is underperforming a bit. If you have an income fund, you should also compare the yield that it produces.
Further key information you will see on a factsheet each month is a commentary from the fund manager. This is worth reading for the insight into his strategy — if you disagree with it maybe you shouldn’t invest with him!
The factsheet will also show in which companies the fund is investing and how the money is split. This fund has 11 pc of its cash in banks, 10 pc in oil and gas firms and about 8 pc in pharmaceutical companies. Its biggest investments include BP, HSBC, AstraZeneca and British American Tobacco.
You can see then that it is heavily influenced by what the FTSE 100 is doing, so the performance of the UK stock market will give you an indication of what’s going on inside your fund.
You also ask how much you are being charged for investing in the fund. This depends on how you bought it. As you have held your investments for some time, it is likely you bought them directly through L&G or a financial adviser. So you were probably charged a 5 pc fee straight away.
The annual fee should be listed on your statement. If you invested through fund supermarket Hargreaves Lansdown, for example, the annual charge is 0.56 pc. It is usually deducted from the returns the fund has made.