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List of large firm offenders in Bestinvest ‘dog’ list


Scottish Widows Investment Partnership (Swip) has been named as the worst offender in the latest Bestinvest ‘Spot the Dog’ report and is joined by peers Schroders, Fidelity, M&G and BlackRock.

To find out how the groups reacted to their inclusion in the ‘dog’ list, see below:

Scottish Widows/Swip

The group had ten funds included in the report, representing just under £6bn:

The £428m Scottish Widows European Growth fund managed by Nick Ford & Nick Millington.

The £208.1m Scottish Widows Global Select Growth fund managed by Iain Fulton.

The £2.9bn Scottish Widows HIFML UK Equity Income fund managed by Chris Fontenla.

The £1.4bn Scottish Widows UK Growth fund managed by Jeremy Charles.

The £359.3m Scottish Widows UK Select Growth fund managed by James Clunie.

The £720.4m Scottish Widows UK Equity Income fund managed by Chris Fontenla and David Keir.

The £182.5m Swip Emerging Markets fund managed by Mark Phillips.

The £19.6m Swip Global fund managed by Stephen Corr and Iain Fulton.

The £64.4m Swip UK Income fund managed by Chris Fontenla and David Keir

The £118.3m Swip UK Opportunities fund managed by James Clunie.

Bestinvest says:

“Once again this fund group tops the list, this time both in terms number of funds with 10 and assets under management which has risen to £5.98bn from £2.28bn last edition.

“The company has a staggering two-thirds of it assets [Funds under management within the 10 key sectors that constitute the Bestinvest ‘dog universe’.] in the dog house and is responsible for over a fifth of all money invested in dog funds. UK, European and Emerging Markets funds are once again responsible. However the group appears to be listening and in April they announced significant changes to their research team.”

Scottish Widows/Swip says:

“In April of this year, we announced that, in response to changing client needs, we would further reposition our £54bn equities business to focus on global and specialist active equities in addition to quantitative equities. This means that we are in the process of transitioning a number of our equities funds, including those in the survey, to the new equities strategy. Swip remains committed to active equities management and will compete in those markets where we have confidence that we can generate strong investment performance and build long-term, valuable relationships with clients.”


Four Schroders funds appeared in the latest report, including:

The £26.3m Schroder Global Climate Change fund managed by Simon Webber & Giles Money.

The £1.2bn Schroder UK Mid 250 fund managed by Andy Brough.

The £793.5m Schroder US Mid Cap fund managed by Jenny Jones.

The £474.3m Schroder US Smaller Companies fund managed by Jenny Jones.

Bestinvest says:

“Schroder continues it’s rise up the list to second place from third place in the last report. This time Schroder UK Mid 250 is joined by three other funds, however this is a shocking sixth consecutive appearance in ‘Spot the Dog’ for manager Andy Brough. Bestinvest downgraded the fund in 2008 and the fund has not left the left the dog house since. This is a clear example of where investors should act and not wait for the group to address performance. The size of Schroder UK Mid 250 continues to fall (From £1.17bn to £1.1bn), investors have paid nearly £60 million in charges over the last three years for chronic underperformance.”

Schroders managing director of UK intermediary Robin Stoakley says:

“Schroders’ overall investment performance remains very strong and ahead of our target with 67 per cent outperformance over three years.

“In addition, our one-year numbers have increased to 54 per cent ahead of benchmark at the end of March 2012, which illustrates the improvement in performance we have seen across a wide range of our funds after the difficult period for active stock pickers at the end of last year.”


Fidelity Worldwide Investment also had four funds in the dog list:

The £1bn Fidelity American fund managed by Aris Vatis.

The £221m Fidelity International fund managed by Richard Skelt.

The £525m Fidelity Moneybuilder Growth managed by James Griffin.

The £422m Fidelity UK Growth managed by Thomas Ewing.

Bestinvest says:

“Having kept its nose clean for a while, Fidelity finds itself catapulted into third place, largely thanks to its US and UK exposure. The £1bn Fidelity American fund makes up a significant bulk of this but isn’t quite the majority – add in the underperforming Fidelity International fund and the UK-focused Fidelity MoneyBuilder Growth and Fidelity UK Growth and the total value in Fidelity dog funds comes out at a total of £2.21bn.”

Head of UK retail sales at Fidelity Worldwide Investment Ben Waterhouse says:

“We are constantly looking to ensure our range of funds meet the needs of our investor base. Fidelity offers 70 onshore funds covering a range of styles, geographies and asset classes. Of those, Bestinvest has identified four funds where performance needs to improve.

“While any underperformance is disappointing, with such a diverse range of funds some of our managers will go through periods of underperformance. Fidelity’s range of funds offers investors a variety of styles and approaches which can be affected in the short term by the prevailing market environment but we aim to out perform the market in the longer term.

“This is a small number of funds in our Oeic range but we do take any underperformance very seriously and do everything we can to make sure our fund managers have the support they need, including access to one of the largest proprietary research teams. We also have a number of funds that have done very well during this period, including Fidelity Smaller Companies, Fidelity MoneyBuilder Income and Fidelity MoneyBuilder Dividend, demonstrating the underlying strength of Fidelity’s approach and focus on rigorous fundamental research.”


Three funds from M&G feature in the Spot the Dog report:

The £1.1bn M&G American fund managed by Aled Smith.

The £104.7m M&G European Strategic Value fund managed by Richard Halle & Daniel White.

The £864.3m M&G Global Leaders fund managed by Aled Smith.

Bestinvest says:

“Falls from second in the list to fourth up from sixth. This time round manager Aled Smith is the manager in the doghouse with both his Global Leaders and M&G American fund being responsible for 95 per cent of M&G’s funds under management in Spot the Dog. Global Leaders returns having last appeared in summer of 2011. Smith’s performance challenges can be traced back as far as 2007 on his Global Leaders, whilst his American fund has started to struggle in more recent years. In a bid to rediscover form the manager and his team have reappraised and made changes to the existing investment process.”

An M&G spokeswoman says:

“M&G European Strategic Value fund – Richard and Dan employ a disciplined value approach in their management of the M&G European Strategic Value fund. Their approach has delivered strong performance since inception in 2008, outperforming the market significantly during the 2008 downturn, unlike many other value funds. The latter three years of that period have proved to be more challenging with ‘value’ as a style underperforming the market by over 10 per cent.

“While the fund’s managers have been able to mitigate this considerable headwind somewhat through active management decisions, there have been few places to hide for disciplined value investors. However, such periods while being painful in the short term, create the very market opportunities that are the rewards offered to long-term investors.

“What is more, the fund managers have remained true to their value principles. They continue to pick stocks based on strict investment criteria and they believe the current environment presents some excellent opportunities for the active value investor. The current portfolio continues to exhibit strong value characteristics, while at the same time managing to achieve better balance sheet strength than the wider market and being underweight peripheral Europe where much uncertainty remains. A position which they believe leaves the fund well placed to achieve healthy returns for investors going forward.”

The spokeswoman adds: “M&G American and Global Leaders funds – Aled employs a fundamental stockpicking investment style. The core tenant of Aled’s investment approach is to invest in companies going through positive internal change where this change is not recognised in company share prices, the outcome of which is a portfolio that is biased towards improving lower returning businesses with more value characteristics. This approach is employed in its most pure form on the M&G Global Leaders fund. On the M&G American fund, while being a core component, it is complemented by investments in under-appreciated quality companies as well as those with more growth characteristics.

“Fundamental stockpicking as an investment approach has been largely out of favour since the start of the financial crisis, as the market has been pre-occupied with macro-economic and political considerations and investor time horizons have become considerably more short term.

“Aled remains resolutely confident that over the long term performance will be driven by company fundamentals rather than macro considerations. He continues to employ a disciplined valuation focused investment approach which has proven itself to generate market beating returns for investors over his nine-year management of the M&G Global Leaders fund and seven-year management of the M&G American fund. Most importantly when Aled examines the individual investments which make up both funds company by company, he is confident of their ability to achieve healthy risk adjusted returns for investors going forward.”


BlackRock also has three funds in the dog list:

The £432m BlackRock UK fund managed by Nick Little.

The £754.1m BlackRock UK Dynamic fund managed by Mark Lyttleton.

The £84.2m BlackRock US Opportunities fund managed by Tom Callan & Jean Rosenbaum.

Bestinvest says:

“The world’s largest asset manager makes a return to the top five with three funds falling foul of the Spot the Dog criteria and these account for 20 per cent of assets under management (as defined by Bestinvest for the purposes of Spot the Dog).

“Former star manager, Mark Lyttleton, is largely responsible for Blackrocks appearance at the top end of the list with Blackrock UK and Blackrock UK Dynamic funds both making an appearance. Lyttleton had built a successful track record prior to the credit crunch although his performance has subsequently suffered. However, Blackrock have done something about it – management of Blackrock UK was handed to Nick Little in February 2012 and Mark Lyttleton recently took a three-month sabbatical during which time UK Dynamic is being managed by Adam Avigdori.”

A BlackRock spokeswoman says:

“The BlackRock UK, BlackRock UK Dynamic and BlackRock US Opportunities funds have all delivered strong returns for investors over the longer term, despite disappointing periods of underperformance, and we are focused on our continued commitment to generate alpha on behalf of our investors.

“The BlackRock UK fund has provided a compounded 6.77 per cent return annually since its launch in 1993, and an annualised return of 9.25 per cent over three years. During the last nine months, the fund has been repositioned towards quality growth franchises and is first quartile over that period, returning 13.61 per cent versus its benchmark, the FTSE All-Share, return of 11.98 per cent. Over the last 10 years, the BlackRock UK Dynamic Fund has returned 92.20 per cent versus its benchmark, the FTSE All Share, return of 80.83 per cent.

“BlackRock US Opportunities fund has delivered strong returns for investors over the longer term. This is evidenced by the fund’s 10.25 per cent annualised return since the fund’s launch in 1987 through to the end of 2010 versus a 6.92 per cent for the S&P US MidSmall Cap index. Regrettably, the fund’s performance has suffered over the last 18 months and the team is taking steps to strike a better balance between companies that are trading at above-average discounts and those that are generating strong cash returns.”

A copy of the report can be accessed by clicking here.

*Fund sizes are taken from the latest provider factsheets available from FE Analytics.


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. This should be taken with a pinch of salt. It refers to performance stats on one date at yearly intervals. If you change the date you get different results. The data for Schroder US smaller companies and mid caps is claimed but not detailed in the version of Spot the Dog that was emailed to me yesterday, so I can’t check their figures. However making a comparison of these 2 funds with Legg Mason US Smaller companies, a fund given 5 stars by Bestinvest, for the date 20th July on the HL website, they have outperformed over 1, 3 and 5 years. They have underperformed the Ishares US smaller companies index, IUSP, however, based on this date. The same problem showed up last summer over Newton International Fund – change the date, different results. I have only checked funds I hold but no one should consider changing their portfolio without making their own comparisons using a different date, or referably dates, from Bestinvest.The noise the media give to “Spot the Dog” is very misleading regarding some funds.

  2. What is that saying – there are lies, damned lies and statistics.

    I am sure anyone worth their salt can make a claim for or against any fund by manipulating the date range for the data used.

    However, if the same dates are used year on year by BestInvest this would suggest a pattern of underperformance by funds that keep on appearing.

  3. i have spent one week trawling through black rock funds to find ant that are performing well over one year………answer none…………there are only a small number in positive territory and then ver small retirns eg 1 to 2 %..I would advise any investor to steer well clear of black rock,,,customer service is vurtually zero…….the company is too big and has far too many funds
    i have only 2 funds ,,one has lost 2,500 in2 years and the other 1,600…does anybody know of any funds in black rock actually making money so i can swich funds and try and recover money

  4. Very helpful guidance. Many thanks

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