Terrible performance - fund manager

[offtothegymagain]

I’m really mad and upset. So I have saved all my ISA allowances for 23 years (my dad gave me some when I was younger and I’ve saved the maximum over all that time) I had it in trackers - it turned out to be around 50/30/20 US/UK/Europe equity trackers with a small bit of emerging markers/corporate bonds/property - probably 5%. I had £780K in it at the beginning of 2025.

My husband uses a fund manager who has done well and for some stupid reason (I’m financially literate but not hugely interested, very busy) I agreed to move it under the ISA wrapper. I hadn’t realised that they pretty much sold the lot in April - bought other trackers Us/Asia which have done well but then invested the rest (around half!) in 4 single companies and 9% UK gilts etc. so basically overall I have 0,9% return over the year. Compared to what the trackers would have done - around 15%.I feel like an idiot. I was tracking the performance but hadn’t realised they’d flogged the lot. I signed a mandate but hadn’t realised that they would sell everything! Massive ball has been dropped there and I feel a complete idiot. And upset as this is my future savings that I’ve been squirrelling away and being careful. I’m not a big earner.

If you’ve made a 0.9% gain, presumably that’s not a loss (albeit relative to inflation). Therefore, can you just revert back to your original strategy and put it down to a bad experience?

Btw, have you asked why they’ve chosen this strategy?

I’d fucking kill my husband and get rid of the fund manager. They are playing about with your money like a toy. And deeply dishonest as they will have known you were not informed or on board with these massive changes to your portfolio. Who the hell invests money in such a high risk way without informing you????

You should have received documentation for all the new trades. It’s a legal obligation of your fund manager to ensure you get those documents in front of you by email or hard copies. Did you not get any prospectus or trade confirmations, statements etc???

Yes I suppose so. I’m just upset, annoyed at myself really. And also at them and my husband!! Who is supposed to have an overview and hadn’t even noticed they’d flogged my trackers! I was looking at my app thinking “my trackers are so flat” totally unaware that the were sold :-(

Yes I am raging. I will ask him. I am an idiot. I signed a mandate but did not agree (in my mind) to such fundamental changes.

How irritating, and you’ll be paying a large fee I imagine. I’m generally not someone who thinks one duff year means a duff fund manager- they are trying to build a portfolio for all seasons and that means it won’t necessarily beat or match the market every year (and I suspect those of us just in trackers will get a shock sooner or later). But I wouldn’t be happy with half my portfolio in 4 companies either. Can you get out without an exit fee?

My risk rating is 7 which I’m comfortable with. We can’t understand the gilts- seems like an error. It makes sense in the bigger scheme (overall portfolio) but not in terms of my isa.

FWIW IME once you’re paying someone they will never just leave you in trackers because clients generally won’t pay 1-2% just to be in a tracker they could have picked themselves for nothing. But managed generally doesn’t beat the market.

My understanding is that trackers mostly beat managed. Some managed best trackers but you cannot predict which these will be upfront. So save the fees and go tracker

I'm lower in the risk rating but only one of my funds have gilts in them.

Over the last year, the fund manager has sold off some US stocks esp tech and moved more into UK, Europe and Asia, some of these have made 15 to 30% over the last year.

Yours is a weird one as the FM take a % so the more the fund grows the more they make

Moving into 4 companies is utter madness, even if in different sectors.

Why you moved when already under ISA wrap is a mystery but its not your DH fault, unless he is the fund manager.

However, you've 740k... not exactly peanuts is it.

Just had another chat with my husband. Which sheds a bit of light. I have more money invested in my name (family money, husband company stuff etc..) of which my iSA is about 20%. So the rebalancing I think was done with the overall portfolio in mind. I was treating my isa as separate as it’s my savings over the years and very personal to me. Overall (including the ISA ) my 1 year return to January was 10% .Fees are quite low 0.5%.

I have always been a tracker fan due to low fees etc… but started to lose my nerve with such a big sum. Also I was persuaded/thought having it all under one umbrella would be good.

It’s not as simple as that. You need to be in the right sectors/have the right funds . This fund manager does have a good track record especially compared to other private fund managers. But yes I’ve always been a big tracker fan previously and I’m annoyed at myself from moving from that stance. Having said that this fund manager has done pretty well prior to this year

He says the ISA wasn’t obviously separated out so he hadn’t realised as it’s just a part of the whole thing. He’s very annoyed and upset at himself. He works in the industry too! He met with them yesterday.

Could it be that you’ve previously been over exposed to the same underlying assets (many trackers invest in the same companies and sectors so there can be significant accidental over exposure). The markets have boomed since Covid & you’ve merely rode the wave of good luck? The inverse could’ve been equally as disasterous?

Well yes! So my trackers were US and also global 100 so definitely weighted that way . As well as UK and Europe plus some other smaller ones (corporate bonds/emerging markets) and I was starting to get nervous about my US big company exposure as it was taking over my portfolio!

Who approved the changes?

I had signed a mandate. I need to see what I’ve actually signed. I didn’t expect them to flog the lot though! :-( They took me out of everything in April right at the lowest point (tariff drama) then half back into trackers which did well but half into individual stocks and gilts which have dropped/static so I didn’t benefit from the market bounce back.

This can be the issue with managed funds, few MF out perform passive ones over longer time periods.

I know! To be fair, this fm had done very well previously. Overall, they’re still outperformed others in their sector but yes that’s why I have always preferred trackers. The numbers got a bit scary though and I bottled it! I don’t have time to keep up with what’s going on so didn’t feel confident to manage that amount, all the different sectors. Maybe I should have had more faith as my vague 40/25/25/10 (original UK/Europe/Us/others)did me well over 25 years!

How annoying for you OP. The thing is, it's fairly common knowledge that in general, trackers outperform managed funds (and you don't have to pay a fund manager!).

Gently though, when £780k is at stake, it's also on you too read, re-read and re-read again anything you're signing, and spend an hour or two doing some decent research.

This isn't the end of the world. You haven't lost money on it - it could have been much worse! Just pop it all back in trackers. I've found it useful to use AI to review the balance of my portfolio, and suggest changes, then use that as a basis to do my own research and rebalance.

780K is a really decent amount, and compound interest will rack up. By the time you come to use the money in X years, you won't even notice this blip. Appreciate that doesn't stop you from being annoyed now!

You’ve found that someone you were paying sold your equities at the bottom of the market.

A fortnight later, when it became pretty clear he’d done that, he didn’t tell you.

Investing in four companies sounds like reckless gambling.

What do you mean 2 weeks?

I think you’re right on all counts! I’m annoyed at myself. I will look at AI- interesting.

I mean the dip last April.

A fund manager is very unlikely to just carry on with what you were doing before - or what would be the point of them? Selling everything and reinvesting in their choice is exactly what I'd expect. Putting such a big chunk 4 individual stocks, though, is crazy.

I'd take the lot back and revert to your original strategy.

I think I was expecting a bit of rebalancing as we do have other investments with them. Not to this degree though and I agree the 4 investments are Urghh -£250k and actually fell over the year.