INVESTORS who put money into an Equitable special situations personal equity plan three years ago would have done better by leaving it in a building society, writes Caroline Merrell.

The fund's annual yield over three years, excluding charges, is 6.23 per cent; gross yield on a higher-rate building society account would be about 7.12 per cent. Earlier this month, the fund changed managers for the second time in five years. The new manager, Paul Gaunt, said: 'It has always been a high-risk equity fund. We simply have not been able to get it right. The fund has backed far too many losers.'

He said the fund's performance had started to pick up at the beginning of this year.

Save & Prosper has two Pep funds in the bottom five, both investing in smaller companies. Mike Ryder Richardson, director, said: 'Smaller companies have been out of favour. What growth there has been in Europe has been in the big capital companies.' He said the fund now included stocks of companies with market capitalisation up to pounds 250m.

Hill Samuel's top-performing fund invests in very small companies that have either just come to the market or are in a recovery situation. David Sachon, managing director of Hill Samuel Unit Trust Managers, said it was just a question of spotting well-managed companies. 'We invest in small companies with a market capitalisation of under pounds 50m. Real babies or real recovery situations.'

----------------------------------------------------------------- Table: Personal Equity Plans ----------------------------------------------------------------- The best pounds 1 Hill Samuel UK Emerging Co's UT 2,846.25 2 Ivory & Sime Personal Assets IT 2,791.99 3 Law Debenture IT 2,708.06 4 St James's Place Progressive UT 2,556.84 5 Henderson TR Electric & General IT 2,491.55 The worst 523 Guinness Flight International UT 1,367.12 524 Save & Prosper European Smaller Co's UT 1,366.55 525 Moorgate General Cons IT 1,312.27 526 Save & Prosper UK Smaller Co's UT 1,234.06 527 Equitable Special Situations UT 1,203.61 ----------------------------------------------------------------- Chart shows the value of pounds 1,000 after three years in unit trust and investment trust Peps. Unit trusts offer to offer; investment trusts mid-price to mid-price. Source: Chase de Vere -----------------------------------------------------------------