Balanced funds underperform in first quarter

The performance measurement firm’s data revealed the median return for balanced and pooled funds over the first quarter of the year was -7.9pc – the first negative return since the second quarter of 2006.

It said balanced fund performance was also negative over a one year period – returning -3.3pc. Over three and five years the median fund returns were 9.3pc per annum and 12.8pc per annum respectively.

BNY Mellon Asset Servicing performance and risk analytics manager Alan Wilcock said: "Equity market returns in the first quarter of 2008 were one of the worst starts to a year we have see on record. Consequently it is not a surprise that there were no positive returns in the Balanced or UK Equity sections of the survey this quarter".

It said all of the equity pooled fund classes within its universe posted negative median returns over the quarter – with the biggest loss coming from Pacific ex Japan funds with a median return of -12.1pc, but which beat its index by 1.3 percentage points.

But it said all other active overseas equity pooled funds failed to beat their respective benchmarks during the quarter.

UK Equity pooled fund managers achieved a return of -9.7pc over the quarter – marginally outperforming the FTSE All Share which returned -9.9pc over the same period.

International bond pooled fund managers achieved a return of 9.4pc; index-linked gilt and cash pooled managers achieved returns of 3.4pc and 1.3pc; and UK bond pooled managers returned -1.2% and underperformed the comparative market index by 2.6 percentage points.

BNY Mellon Asset Servicing’s pooled pension fund database covers 76 separate asset managers who manage over £419bn in both balanced and specialist pooled funds.