The UK's largest retail fund beat its benchmark by almost nine percentage points last year, outperforming more expensive, less restricted hedge funds over the last one, three and five years and highlighting challenges facing the hedge fund industry.

The £8bn (€8.6bn) high income fund run by Invesco Perpetual retail fund, run by manager Neil Woodford, generated a loss of 19.4% last year before fees, which depend on the investor but will typically amount to 2%, according to data provider Lipper Feri.