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Dog pound

The majority of the funds on Bestinvest’s latest Spot the Dog list are UK-invested. Chris Salih reports

More than half of the funds on Bestinvest’s recent Spot the Dog survey invest in the UK.

The latest survey, which probes the biggest mutts in the investment industry, found 40 out of all 77 dog funds are from the UK, up from 25 in January, with a number of leading UK equity income funds being dropped into the dog house.

Tony Nutt’s Jupiter income was the biggest name to drop into the list, with the £2.8bn fund meeting the Bestinvest criteria that a vehicle must underperform its benchmark in each of the last three years, as well as by 10 per cent or more cumulatively over the full period.

Nutt’s offering fell exactly 10 per cent in that timeframe and joins the likes of Axa Framlington equity income and monthly income funds, Fidelity income, Liontrust first income, Rathbone income and New Star higher income on the list.

Despite the fall in the past six months in the number of funds, from 82 to 77, assets in dog funds almost doubled from £7.2bn to £14.22bn over the period.

Nutt’s inclusion puts Jupiter at the top of the list of firms with dog funds under management at £2.9bn. Schroders was second with £1.76bn of asset under management after Andy Brough’s £1.7bn fund fell made it onto the list. Scottish Widows, St James’s Place and Henderson New Star rounded off the top five.

A spokeswoman for Jupiter says: “As Bestinvest itself points out, Jupiter income has only just slipped onto the list because their figures are rounded up.

“Performance over three years has been broadly in line with the peer group, and over the past year, five and 10 years, the fund has beaten the average equity income fund.

“Furthermore, in Best’s Spring 2009 report, Jupiter was top of their ‘Crufts candidates’, which shows how volatile these reports can be.”

Schroders head of UK marketing James Rainbow says: “Schroders’ overall investment performance has been very strong, with 80 per cent of funds outperforming their benchmark over 12 months to the end of June 2009, and 77 per cent outperforming over three years.”

“To put the Bestinvest report into context, over one year and in the recent rally, not one mid-cap fund has outperformed the index.

“Against its benchmark, the Schroder mid-250 fund is the second best performing fund of its type year to date and over six months.

“In the context of funds investing in the UK equity market, the Schroder mid-250 fund is in the first quartile in the year to date and over one and five years.”

Aberdeen and Henderson New Star topped the list of larger groups with dog funds, with six in their respective ranges.

Legg Mason Japan steals the gong for the biggest underperformer in the dog list, having fallen 49 per cent in the past three years, closely followed by a raft of UK vehicles, with New Star higher growth and higher income down 37 and 35 per cent respectively over the same period.

M&G topped the list of Crufts candidates on this occasion with 16 funds and £13.3bn of assets. The group was followed by First State and Neptune with £5.2bn and £3.4bn respectively.

Bestinvest senior investment adviser Adrian Lowcock says: “The flash headline has been the jump in the assets in these dog funds. UK equity income has had a lot to do with that, given the tumultuous two years we have seen and the fact they have had to sell out of the banks as they have been falling.

“I think they will rally as the gap between defensive and cyclical stocks starts to narrow.”


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