How Much? Jupiter Merlin Worldwide Portfolio

Over 10 years, this fund is among the top 25 per cent of Global sector funds in terms of performance. But it is included the RedZone because it has consistently underperformed its sector peers over three years. Jupiter Merlin Worldwide Portfolio is among the bottom 25 per cent of Global funds in terms of performance over one and three years, and in the third quartile over five years.

But while delivering this disappointing performance, the fund also has a high ongoing charge of 2.56 per cent. The higher charge is partly because it invests in other funds and has to pay their investment charges. This approach can be more expensive than investing directly in equities.

But some other funds of funds don't have such high charges and perform better. For example, in the same fund sector, Cazenove Multi Manager Global (GB0031548968) is among the top 25 per cent of funds in terms of performance over one, three and five years, but charges 1.94 per cent.

However, John Chatfeild-Roberts, head of the Jupiter independent funds team, says: "It can sometimes be the case that themes we have exposure to in the portfolios have not yet played out in markets and we believe this to be the case with regard to our recent performance. While our underlying manager selection has been positive, the themes we are exposed to have negatively impacted performance in the short term to varying degrees. These are:

■ being overweight in emerging markets, particularly Asia and Latin America;

■ more dollar exposure than our competitors;

■ less UK exposure, which has surprised with good cyclical performance; and

■ gold exposure.

But recent portfolio changes should enable the fund to benefit from the resurgence of the US economy and a turnaround in Japanese economic policy while allowing investors to benefit from some attractively priced emerging market companies."