Investors have £43.9 billion of cash tied up in ‘dog’ investment funds according to new report

14 February 2020
  • A year on from raising the alarm bell on the Woodford Equity Income fund, the latest Bestinvest Spot the Dog report returns to name and shame the ‘worst of the worst’ investment funds
  • The latest report has identified 91 underachieving investments, representing £43.9 billion of savings. These collectively rake in over £410 million of fees and costs each year
  • The kennel club includes 11 Great Dane sized funds, each holding over a billion of assets, including the final appearance of the former Woodford Equity Income fund – the worst performer in the report – ahead of it being put down for good
  • Fund giant Invesco retains the Top Dog spot for the fourth time, with the number of funds snared rising to 11. These represent over £13 billion of assets – 30% of the total
  • North American funds return to the kennel with a vengeance, with 30% of US equity funds classified as dogs. 
  • A full copy of the 24-page report will be available to download free of charge from midnight on Friday at

Are your long term savings being hounded by weak investment returns? Identifying whether the funds you own in your ISA or pensions are up to scratch is harder than you may think when markets have risen sharply over the last year. 

To help investors in this task, Bestinvest, the online investment service, will this weekend publish the latest edition of its bi-annual, infamous Spot the Dog report. The report, which has been published regularly since the mid-nineties and is loathed by the fund management industry, names and shames stock-market investment funds that have consistently deliver poor returns in the markets they invest in.

The latest edition comes a year after it slapped the “Dog” label on the once popular Woodford Equity Income fund. The fund went on to suspend trading several months later, trapping investors and is now in the process of being closed down altogether, leaving investors who stuck with it as a faithful friend with losses.

The Bestinvest Spot the Dog report looks at unit trusts and open-ended investment companies available to private investors that invest across a wide range of stock-markets around the globe. The report covers funds investing in the UK, Global equities, North America, Europe, Japan, the Asia Pacific and Emerging Markets.

To be included in Spot the Dog, a fund must have met two performance criteria: firstly, it must have delivered a worse return than the market it invests in for three consecutive 12-month periods on the trot – in this case, the calendar years 2017, 2018 and 2019 – and, secondly, it must have also underperformed that market by more than 5%, after fees, over the entire three year period. Bestinvest applies these twin filters to identify consistent underperformers, rather than funds that may have experienced a short-term wobble, as well as to screen out tracker funds that typically deliver a slight underperformance of the markets they shadow each year due to their running costs.

The latest report sees 91 funds meet the strict criteria, a sharp increase on the 59 funds identified in the previous report published six months ago. The latest crop of mutts represents a combined war chest of £43.9 billion of assets, including savings held in Individual Savings Accounts and Self-Invested Personal Pensions. Based on this level of assets and the ongoing costs of the funds included, Bestinvest estimates that these funds are generating circa £410 million in lucrative annual fees and costs.

While many of the funds in Spot the Dog are small in size, with the median fund being just £132 million, 11 funds are classified as Great Danes, each of which has over £1 billion of assets. These include funds managed by groups such as Invesco, M&G, Hargreaves Lansdown and Schroders.

The “Top Dog” position continues to be hogged by Invesco, which has 11 funds included with a combined size of £13 billion. Prominent among these are three managed by former Woodford protégé Mark Barnett, now co-Head of UK Equities at Invesco’s investment centre in Henley: Invesco High Income, Invesco Income and Invesco UK Strategic Income. However, the list of Invesco hounds also includes funds investing in Europe, the US and Japan.

Jason Hollands, Managing Director at Bestinvest, commented:

“2019 was overall a fantastic year for stock markets across the globe, providing investors with double-digit returns. In such an environment it is all too easy to assume that the managers of your investment funds must be doing a great job. However, in many cases the returns enjoyed have had little do with the decisions taken by fund managers and they may be substantially lower than the gains delivered by overall markets. In these circumstances, investors have basically paid fees for little or no added value. It is really important, therefore, to regularly review the funds you hold and to assess their performance against the market backdrop. Where a fund has significantly underperformed, it is vital to delve deeper into the reasons why and consider whether or not to stick with it or move elsewhere.

“Lagging market gains is one thing, but in some circumstances things can be much worse, in the form of outright losses. In our report 12-months ago, we highlighted the Woodford Equity Income fund as a “dog” having already moved the fund to a “switch” rating on Bestinvest in early 2018. In June last year the fund “temporarily” suspended trading, trapping investors who had remained loyal to the fund. The fund makes its final appearance in Spot the Dog in this edition, under the banner of LF Equity Income, as the fund’s Authorised Corporate Director, Link Fund Solutions, has decided to make the temporary suspension permanent, removing Woodford as manager and closing the fund altogether. While this has been a shocking and highly unusual saga, it is an important reminder of how incredibly important it is to regularly review your investments and to potentially make changes.”

“If you haven’t given your investments the equivalent of an MOT for some time, it really does make sense to do so.”

- ENDS -

The Biggest Beasts in Spot the Dog




(£ bn)


3 year under-performance*

Value of £100 invested after 3 years


Invesco High Income (UK) Y


UK All Companies




JPM US Equity Income C


North America




LF Equity Income (formerly Woodford)


UK All Companies




HL Multi-Manager Income & Growth A


UK Equity Income




Invesco UK Income (UK) Y


UK All Companies




Artemis Global Income I


Global Equity Income




Invesco European Equity (UK) Y


Europe ex UK




M&G Recovery I


UK All Companies




Man GLG Japan CoreAlpha Professional






Schroders QEP Global Active Value Z






St. James’s Place UK High Income L


UK Equity Income




Jupiter UK Growth I


UK All Companies




Invesco UK Growth (UK) Y


UK All Companies




Schroders QEP Global Care I






Janus Henderson Global Equity Income


Global Equity Income



*This is the extent to which the fund has delivered a lower return over the three years to end December 2019 than the market in which it invests (after fees).  The value of £100 after three years includes the reinvestment of any dividends.

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