14% Of funds now on Bestinvest's dog list
Nearly one in seven retail equity onshore funds are underperforming as the overall value of assets in dog funds leaps by 74 per cent to £23.1bn, according to Bestinvest’s latest Spot the Dog list.
The list shows 94 of the 682 funds, or almost 14 per cent, have failed to beat their benchmark index in each of the last three years while underperforming the index by at least 10 per cent.
Over £23bn of UK investors’ money is sitting in underperforming funds in the nine sectors, up from £13.3bn in November 2010. The sectors are: UK all companies, UK equity income, UK smaller companies, Europe ex UK, global emerging markets, Asia Pacific, North American, Japan and global. IMA global sector funds are among the worst performers, with 27 dog funds identified, up from 11 in 2010.
The top three fund management groups by assets under management on the list are Fidelity at £3.4bn, Newton at £2.1bn and BlackRock at £2bn.
Twenty-two per cent of Fidelity’s funds by value are now on the list, along with 19 per cent of Newton’s and 29 per cent of BlackRock’s funds.
The worst-performing fund according to Bestinvest’s criteria is the £11.7m Allianz RCM global ecotrends fund, which was down by 41 per cent over a three-year period compared with the benchmark.
It is closely followed by the £35.5m Manek growth fund, which saw a 38 per cent loss over the same period.
Bestinvest senior investment adviser Adrian Lowcock says: “The overall value of assets invested in dog funds has taken a shocking leap, rising by over 74 per cent to more than £23bn. Once again, it is clear that the industry has little appetite to address abject underperformance. Until they do, it is doubtful whether fund managers will ever be sufficiently motivated to clear up after their dogs.”