A whopping £7.6 billion is currently languishing in funds that consistently underperform.
That’s according to the latest ‘Spot the Dog’ report from Bestinvest, which looks at the UK’s worst-performing funds.
In order to make it onto the list a fund has to have underperformed its benchmark by 5% or more over three years.
Aberdeen Asset Management features heavily, with five funds in the list making up a total of £2 billion of the cash.
“In recent years, Aberdeen Asset Management has been one of the most prominent groups in the doghouse, but in the last edition we noted a steady decline in the number of funds and assets,” says the Bestinvest report.
“It is therefore dispiriting to see Aberdeen return to the top of the hall of shame once again with both an increase in the number of funds and a rise in assets to more than £2 billion.”
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Worst performers
The worst performer is Aberdeen Asset Management’s mammoth Aberdeen Asia Pacific Equity fund which holds a total £1.3 billion of investor’s money.
The fund returned 38% over the three years to the end of June, that’s 7% behind the benchmark, the MSCI Asia Pacific ex-Japan index.
However, much of that poor performance was back in 2015, so far this year it is outperforming the benchmark up 14.4% against a 13.8% rise in the index.
With £1.7 billion sitting in underperforming funds St James’ Place takes second place on the dogs list.
It also runs the only UK equity fund to be branded a dog – the £1 billion St James Place Equity Income, which has delivered just a 13% return over the past three years, is 8% behind the benchmark.
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Where are the ‘doghouses’?
Here’s a breakdown of which investment houses have the most money sitting in badly performing funds.
|
Group |
Value of dogs |
Dog Funds |
|
Aberdeen |
£2bn |
Asia Pacific Equity; Asia Pacific & Japan Equity; European Smaller Companies Equity; World Equity Income; World Equity |
|
St. James Place |
£1.6bn |
Equity Income; Asia Pacific; US Small and Midcap Companies; Ethical |
|
Henderson |
£1.2bn |
US Growth; World Select; Global Equity Income |
|
Jupiter |
£536m |
China; Global Equity Income; Global Managed; |
|
First State Investments |
£442m |
Global Resources |
|
Old Mutual |
£378m |
Global Best Ideas; Ethical |
|
M&G |
£327m |
Global Recovery |
|
Liontrust |
£173m |
Global Income |
|
Standard Life |
£172m |
Global Equity Income |
The number of funds being branded ‘dogs’ has fallen this year, and BestInvest hope this is a sign that the dogs could be heading for extinction.
“Pleasingly there are just two funds that are ‘big beasts’, both have over a billion of assets, with most of the funds included in this report being pretty small in size,” says Jason Hollands, managing director at BestInvest.
“The overall drop in funds hitting our exacting criteria is also encouraging, but it remains to be seen whether this is a technical blip or a sign of a more meaningful trend coming through.”
The number of dog funds peaked at 113 in 2012.
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