The Edinburgh-based asset manager highlighted that seven of its 40 funds were “flagged for review”, five funds had “a potential issue”, and two of the funds had “identified a more serious issue” following review for the year to March 31, 2026.

It confirmed in the report that some of the issues are already being addressed following its regular review process, which highlighted issues before the formal AoV review took place. As part of the review, it broke down the seven underperforming funds and detailed what was wrong and what they are doing to fix them.

The five funds flagged with a potential issue (amber rating) were: Royal London European Growth Fund, Royal London GMAP Diversified Bond Fund, Royal London European Growth Trust, Royal London GMAP Dynamic Equity Fund, Royal London UK Growth Trust.

Meanwhile, the two funds flagged with “a more serious issue” (red rating) were: Royal London UK Mid Cap Growth Fund and Royal London UK Smaller Companies Fund. The board decided to close down the UK Smaller Companies Fund on August 6 as it determined recovery was not possible following a major institutional investor’s decision to disinvest.

The board is monitoring the progress of its UK Mid Cap Growth fund after replacing members of the fund management team to see whether these changes will improve performance.

It noted that recent market conditions have been “challenging” with the war in Ukraine and “hostilities involving Iran”, which drove short-term rises in oil prices and oil company shares, adding that shareholders in its sustainable funds have been at a “disadvantage during these periods” as they avoided certain sectors such as oil. 

The board stated that the fund managers pointed to the investment process that measures success over a longer period of time, even “decades” compared to “one that targets the next 12 months.”

They wrote: “It is an understatement to say that the 12 months since our previous report were demanding for investors. We started with the Trump tariff announcements in April 2025 and ended with global energy prices shooting higher following the start of the US/Iran conflict in March 2026 – but with equity markets swinging wildly at times in between due to ongoing uncertainty over US policy, UK politics and ongoing war in Ukraine, amongst other factors.”