There has been a ‘dramatic’ reduction in the number of funds on Bestinvest’s Spot the Dog list of worst performing retail funds – although Jupiter has been put in the dog house for the first time.
Bestinvest has highlighted 64 unit trusts and Oeics with combined assets under management of £12.1bn in the latest edition of its ranking. This is down from the 113 funds running £26.6bn included in the summer of 2012 list.
To identify the worst performing equity-based retail funds, Bestinvest looks for portfolios that have underperformed in each of the last three years and by more than 10 per cent over the three years to the end of 2012.
Scottish Widows/Swip remains the “top dog in the house” after four funds running a total of £3.96bn were included in the list, followed by BlackRock with £1.27bn, Baillie Gifford with £1.08bn and F&C Investments with £613m.
Jupiter is a new addition to the dog house list, with two funds – Jupiter China and Jupiter Ecology – with assets of £501m on the list. Bestinvest says Jupiter’s inclusion is owes largely to the Jupiter Ecology fund after green funds in general had a “tough run” against broader indices. The group was ranked 20th in the previous list.
In terms of sectors, IMA North American had the largest pack of dogs with 18 funds highlighted. IMA European and IMA Absolute Return, on the other hand, feature just one dog each.
Bestinvest managing director of business development and communications Jason Hollands says: “Sadly the funds listed in Spot the Dog represent the tip of the iceberg of poor performance because the criteria we have set are designed to focus on the very ‘worst of the worst’.
“The purpose of the guide is raise awareness because in our view financial product providers too easily get away with dismal or uninspiring performance, benefitting 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.”
Hollands adds that a fund’s inclusion on the list should not mean an investor automatically sells their holding, as the asset manager could have implemented steps to rectify performance, but it should act as a prompt to review their performance.
JPMorgan Asset Management, M&G, AXA Investment Management and BNY Mellon/Newton are asset management houses that have no funds in Spot the Dog despite managing extensive ranges.