Spot the Dog guide reveals the funds in the dog house, as assets held in abysmal performers swells to £13.3 billion

19 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 -

Important information
The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Past performance is not necessarily an indication of future performance. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

We aim to provide investors with information to help them make their own investment decisions although this should not be construed as advice or an investment recommendation. If you are unsure about the suitability of an investment or if you need advice on your specific requirements, we strongly suggest that you consider professional financial advice.

About Bestinvest:
Founded in 1986, Bestinvest has grown to become a leading private client investment adviser, looking after £5 billion of assets for more than 50,000 clients. We offer a range of investment services from Select for self-directed investors to Investment Advisory and Investment Management services for clients who do not have the time or inclination to manage their own investments.

All of our services are underpinned by rigorous research aimed at identifying those fund managers we believe will deliver long-term superior performance. We also have a team of expert financial planners with nationwide coverage to help clients with their pensions, retirement or Inheritance Tax planning. At Bestinvest, we pride ourselves on offering the highest levels of professionalism and expertise with transparent, competitive prices. We are pleased that our greatest source of new business is from personal referrals from existing clients.
Bestinvest has won numerous awards including UK Wealth Manager of the Year 2013, Best Wealth Manager for Investments 2013, Best Stockbroker for Customer Service 2012 and 2011 Self Select ISA Provider of the Year as voted by readers of the Investors Chronicle and the Financial Times.

Headquartered in Mayfair, London, Bestinvest employs more than 200 staff and has an extensive network of regional offices. The company is one of the fastest-growing private client advisory firms.

About Tilney

Tilney is a leading investment and financial planning firm that builds on a heritage of more than 150 years. The Tilney Group operates under the Tilney brand for Investment Management and Financial Planning and Bestinvest for execution-only investing. We look after more than £22 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.

We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.

We have won numerous awards including Best Fund Platform and Best SIPP Provider at the 2017 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.

Headquartered in Mayfair, London, Tilney Group employs over 1,000 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.