Spot the Dog guide reveals the funds in the dog house, as assets held in abysmal performers swells to £13.3 billion19 July 2013
- Rising markets have helped swell the size of many underachieving funds so the level of assets in dog funds has risen to £13.3 billion in this latest report
- The IMA Global Sector holds the largest number of dogs (17 funds) - but the IMA North America sector holds the highest percentage of dogs (21%)
- Fund groups managing the largest volume of dog assets are Schroders, Neptune, Fidelity, F&C and UBS
- Readers offer: Spot the Dog can be download for free at www.bestinvest.co.uk/dogs
Those tempted to invest in funds over the summer months, or who haven’t reviewed the contents of their ISAs for a while, should make sure to get hold of a free copy of the latest Spot the Dog guide from Bestinvest. The twice-yearly landmark report names and shames the retail investment funds which are the leaders of the pack for consistent under performance.
The latest edition of Spot the Dog, published this week, has identified 59 unit trust/OEIC dog funds, down slightly from the 64 Bestinvest highlighted in January. However rising markets have helped swell the size of many underachieving funds so the level of dog assets has risen from £12.1 billion at the start of the year to £13.3 billion in this latest report. Each of these funds met the strict criteria applied by Bestinvest of having underperformed in each of the last three years and by 10% or more over the three years.
US managers are left licking their paws
The large IMA Global Sector holds the largest number of dogs (17 funds), five of which have ethical or environmental strategies. However the sector with the highest proportion of mutts is the IMA North America sector, where a staggering 21% of funds have dog tags around their collars, reinforcing the view that the US market is one of the hardest to beat.
Groups in the kennel club
Groups leading the pack of underperformers in this edition are Schroders (£4.1bn), Neptune (£1.4bn), Fidelity (£1.2bn), F&C (£734m) and UBS (£662m). When it comes down to those managing the largest number of funds, Neptune and Legal & General tie-jointly with 5 funds each.
On a more positive note, while most large fund groups have a howler lurking somewhere in their fund ranges, sizeable retail fund groups that currently have no funds in Spot the Dog include Invesco Perpetual, M&G, Threadneedle, First State, HSBC, Artemis, Cazenove, Aviva, Old Mutual and Royal London.
Scottish Widows Investors Partnership (SWIP), previously a regular fixture at the top of the dog charts, has fallen down the rankings as previous old dogs Scottish Widows UK Select Growth, Scottish Widows UK Growth and Scottish Widows UK Equity Income have had a better 12-months, moving from fourth to third-quartile performance.
Jason Hollands, Managing Director at Bestinvest, commented: “The tide of rising markets has lifted most ships over the last six months and that includes many funds which are nevertheless poor relative performers. It is important for investors to remain vigilant and ensure that the actively managed funds they hold are adding valuing over and above general market movements and that the fees they are paying are therefore justified. Sadly the funds listed in Spot the Dog represent the tip of the iceberg of poor performance because the criteria we have set is designed to focus on the very ‘worst of the worst’. In our view financial product providers too easily get away with dismal or uninspiring performance, benefiting from a combination of investor inertia and advisers failing to provide a satisfactory level of monitoring on investments they have previously recommended to their clients.”
“Historically, many people will have turned to their financial adviser to keep a close eye on their investments. But with the replacement of commission-based advice at the start of the year, requesting an appraisal could now come with a potentially hefty fee attached, and some people may discover they have been quietly dropped. The good news is that Bestinvest provides a Free Investment Report Service & Tool – Bestinvest.co.uk/first - to help investors analyse their portfolio, so they can easily check whether their portfolio harbours any dogs without incurring any fees.”
Readers offer: From 19 July members of the public can get a free copy of the latest edition of Spot the Dog either by downloading it from www.bestinvest.co.uk/dogs or by calling 020 7189 2462 to request a copy.
- ENDS -
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