Dog funds take £14.25bn bite, says Bestinvest
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UK investors have £14.25bn in underperforming ‘dog funds’, according to the latest survey from Bestinvest.
The biannual study reveals that the worst performing funds in the investment universe saw a 3.8 per cent rise in assets under management since the last report in October where the figure totalled £13.72bn and a dramatic 96 per cent increase since the £7.2bn reported in January 2009.
Invesco Perpetual tops the dog list with £1.7bn in assets under management across three funds and the only group with a dog fund in the US sector but Henderson has eight underperforming ‘dog funds’ following its integration with New Star, the highest number of any fund group.
Schroders follows with £1.6bn of dog assets and its Schroder European and Schroder mid-250 featuring in the report.
Scottish Widows and F&C Asset Management are also in the dog house with seven and three funds respectively.
Bestinvest senior investment adviser Adrian Lowcock says: “The upswing in the value of assets under management in dog funds highlights the huge number of assets being held in underperforming vehicles and the rise in the actual number of dog funds illustrates just how this is spreading across asset classes.
“It is vital that investors review their portfolios regularly to ensure they are getting the best possible returns.”
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Readers' comments (5)
Sean | 24 May 2010 12:24 pm
On what basis do they assess funds to be dogs. Chasing short term performance is what results in loss. If a fund is consistently underperforming its peers then fair enough call it a dog. But dont fall into the trap of comparing it with funds that have made spectacular returns as this is usually on the back of spectacular falls at an earlier date.
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John D Taxpayer | 24 May 2010 2:09 pm
It's all very well for Adrian Lowcock to impress upon investors the need to regularly review their funds but, having conducted such a review and found a few 'dogs' in their portfolio, what does he suggest they do next? Move them to funds with less of a canine feel? Who's to say that, two years after such a switch, the new fund won't have moved into a kennel of its own?
Unless Adrian is telling us that he knows which funds won't be tomorrows dogs then I struggle to see what this survey really achieves - apart from depressing a group of unfortunate investors even more than they were already.
One thing we can be sure of. Constant flitting from fund-to-fund is a long term losing strategy - purely because of the frictional costs involved
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Raynes IFA | 24 May 2010 3:18 pm
John D Taxpayer, I agree that no one can possibly call the market accurately 100% of the time.However, there are those who historically have done so successfully the majority of the time. Many individuals would disagree that regular reviews of an investment portfolio is a long term losing strategy, if this was the case why would so many pay for the service?
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John D Taxpayer | 24 May 2010 3:33 pm
Perhaps we might also ponder why people pay good money for anti-ageing cream, 'Wonder Diet Pills' or hair restoring liquid.
Could it be because someone else tells them it's a good idea?
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Alex Thompson | 12 Jun 2010 6:41 pm
great
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