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There have been better alternatives than the UK stock market for dollar-based investors during the past few years.
Sluggish economic performance and protracted Brexit instability has led to underperformance against other equity markets, and a chaotic policy response to the Covid-19 pandemic has meant that recovery from the late-March nadir for risk assets has lagged other indices.
While the MSCI All Country World Index has bounced back vigorously from the February-March shock, and has a cumulative three-year return of 26.42% in US dollar terms, the FTSE All Share Index is still in the red, down 9.07%, according to FE Fundinfo.
The poor relative return is equally stark over a longer period. The UK benchmark is down 0.24% over five years and up an anemic 40.97%, compared with the broadly-based MSCI benchmark, which has risen 61.97% and 147.16% respectively, FE Fundinfo data shows.
Clearly, it’s been a tough decade for UK equity fund managers, but Darius McDermott, managing director of Chelsea Financial Services, compares for FSA a couple of products run by two of the best-regarded managers in the sector: the Merian UK Alpha Fund and the Schroder ISF UK Equity Fund.
|Managers||Richard Buxton||Alex Breese|
|Three-year cumulative return||-14.08%||-27.96%|
|Three-year annualised return||-5.52%||-10.83%|
|Three-year annualised alpha||-4.18||-4.81|
|Three-year annualised volatility||24.75%||25.17%|
|Three-year information ratio||-0.57||-1.09|
|Morningstar star rating||***||–|
|Morningstar analyst rating||Silver||–|
|FE Crown fund rating||*||*|
|OCF (clean share class)||1.95%||2.34%|