Invesco and Woodford Investment Management have topped Bestinvest’s Spot the Dog list of underperforming funds.
For the third time in a row, Invesco has been named “top dog” for both the number of funds and value of assets held in them. More than £11bn of assets spread over six funds are highlighted on the list of the worst performing funds over three years.
Woodford, meanwhile, has just one fund on the list but assets are £3.7bn, meaning it is placed higher than Janus Henderson, St James’s Place and Fidelity which follow.
The Spot the Dog list is an update from January’s list, but has just 59 funds rather than 111 at the start of the year.
Bestinvest says it is pleased there has been a “similar reduction” in the amount of money “languishing” in the so-called dog funds; collectively the funds hold £32.6bn, down from £54.6bn in January.
The UK space has been the focus of many media stories over the past few months after Woodford gating the Equity Income fund, which has underperformed its benchmark by 38 per cent over the time period followed on the list.
UK Equity Income has seen more than half of the funds listed in January escape this time around. In the January edition, there were 25 dog funds totaling £8.1bn assets, while it is now £3.7bn across nine funds. The St James’s Place High Income fund is – again – the biggest and worst-performing in the sector, underperforming its benchmark by 30 per cent. Until recently, the fund was run by Neil Woodford, who Bestinvest says “has had a torrid run of performance over the last few years.”
The fund management was passed on to Richard Colwell of Columbia Threadneedle and Nick Purves of RWC. Bestinvest says: “It will be interesting to see how quickly the pair can turn the fund’s fortunes around, and perhaps even escape the doghouse.”
Two funds in the list (MI Somerset Emerging Markets Dividend Growth and BlackRock Continental European Income) also feature in the group’s top-rated fund list. Bestinvest say the Spot the Dog list is not a list of funds that should be sold immediately, rather a statistical analysis of how funds have performed over the past three years. It adds: “While these funds have underperformed the markets over the past three years, we still maintain our conviction that they can deliver for investors over the long term.”