Short positions...

Last year’s market boom masked the underperformance of Britain’s worst-performing funds, which drew over £400m in fees that year while lagging their sectors by an average of 5%, says Sam Benstead in The Daily Telegraph. Stragglers included the £3.2bn Invesco UK Equity High Income, which generated an estimated £31.5m in fees while lagging the index by 3%, according to calculations by wealth manager SCM Direct. Fidelity Special Situations collected £27m while trailing by 2%, while Jupiter UK Special Situations took in £18m despite being 4% behind the index. A total of £157bn was invested in weak funds last year and would have seen greater returns if placed in a cheap market tracker. In 2021, two-thirds of active funds failed to beat their benchmark index, according to stockbroker AJ Bell.

Shares in Scottish Mortgage Investment Trust have fallen 29% since November as rising interest rates dent demand for the type of disruptive growth stocks the trust favours, says Gavin Lumsden on Citywire. Scottish Mortgage has seen stellar performance from early investments in firms such as Tesla, which has produced a 1,664% shareholder return over five years. The trust’s net asset value (NAV) has fallen 19.4% over the past month, although the share price is trading close to NAV, which shows that the fall is due to the decline in the value of its holdings rather than investors losing faith in its strategy. Scottish Mortgage has seen greater falls in its value before, as deputy manager Lawrence Burns pointed out in a webinar last week. It fell almost two-thirds in the 2008 crash, before growing twenty-fold to where it stands today. “Being down 30% or 40% is not a nice place to be. But it’s the worst time to sell.”