The situation is worse for those funds that focus on providing investors with an income. Just 21pc of British income funds beat the market in the downturn, with 41pc able take advantage of the rebound.
Income funds have been hit hard as companies have stopped paying dividends to conserve cash and ensure their survival during the coronavirus crisis. Businesses that paid large dividends – such as banks, oil companies and retailers – have largely cut or stopped their payouts, which has caused the share price to fall significantly.
Active managers’ inability to beat the market is not limited to income funds nor to the recent market turbulence. Mr Dennehy said that as few as one in 10 funds available to investors had beaten a comparable passive fund over the past 10 years.
“As with investors generally, fund managers are not terribly good at trying to exploit trends, either missing them altogether or being very late to the party, as is the case now,” he said.
For the bulk of investors, a stock market tracker, also known as a passive fund, is the best way to invest, as it gives them broad exposure to British companies without the potential to make major mistakes.
The SPDR FTSE UK All Share fund is Telegraph Money’s favourite for people who want to invest in Britain. It includes nearly 600 companies and is very good at mimicking the FTSE All Share index. With an annual charge of 0.2pc it is not the cheapest passive fund to cover the market but rival funds are much smaller and are less accurate at tracking the index.
For those who prefer to trust a fund manager to beat the market when it is both rising and falling, the Royal London Sustainable Leaders Trust has been the best British stock market fund this year. It has lost just 1.4pc while the FTSE All Share has dropped 15pc. The fund is one of the 18pc of British funds to beat the index both in the market fall and in the rebound.
Finding an income fund to beat the market in both periods was more difficult. Just 9pc of funds managed the feat. The top performer was Miton UK Multi Cap Income, which is down 5.8pc in 2020.