All but one of Legal & General’s 77 funds have been found to deliver value, according to the group’s Assessment of Value (AoV) report, which singled out Legal & General UK Alpha trust as the sole underperformer.
Managed by Rod Oscroft and Simon Reid, the fund will be subject to a "comprehensive review" in order to "identify an action plan to improve the fund's ability to deliver value", having delivered a performance "well below" its outperformance target over the assessment period.
An investor would have achieved better returns by investing in the LF Equity Income fund, formerly managed by Neil Woodford, from inception.
Despite its high-profile suspension and winding up over the course of 2019, the fund would have delivered investors a loss of 27.1% since June 2014, a better return than the 33.17% loss suffered by investors who put their money into L&G UK Alpha Trust at the same point, according to data from FE fundinfo.
This underperformance has been attributed to the fund being invested in "very small UK companies that have significantly underperformed larger companies" and to improve future performance, the manager has "taken steps" to reduce exposure to these very small companies.
Of its active funds Legal & General's AoV said: "By design, active funds generally aim to outperform a given market benchmark over time, hence some periods of underperformance should be expected.
"Where funds performed below expectations, we asked the Fund Management Oversight Committee to conduct further performance analysis and interview the portfolio managers to determine the root cause of underperformance.
"We have concluded that for 15 out of 16 funds the actions taken to improve the performance are appropriate, and we are comfortable that the fund will continue to deliver value."