Harry Nimmo’s £1.3bn Standard Life Investments UK Smaller Companies fund has been named on the 49-strong Bestinvest Spot the Dog list for the first time after underperforming its benchmark by at least 10 per cent for three years.
Nimmo’s UK Smaller Companies fund made a relative return of 16 per cent less than its Numis Small Cap ex Investment Trust benchmark, second only to the SF Webb Capital Smaller Companies fund.
Bestinvest managing director Jason Hollands says: “This is a first ever appearance by Standard Life UK Smaller Companies in Spot the Dog. I am sure this will surprise many given the strong reputation of Harry Nimmo and his outstanding long-term record. However, the numbers are the numbers.”
Three M&G funds make up 55 per cent of the £19.55bn assets on the list as Tom Dobell’s £6.7bn M&G Recovery, Randeep Somel’s £3.1bn M&G Global Basics and Aled Smith’s £924m M&G American funds are all named.
Hollands says: “The jury remains out on M&G Global Basics, which saw Randeep Somel appointed as its new manager in November last year following the departure of longstanding manager Graham French.
“Tom Dobell, manager of the M&G Recovery fund, had delivered excellent returns up until the financial crisis but has disappointed for some time now. The brief of the fund is to invest in unloved companies and the approach is inherently long term, but having underperformed in four of the last five 12-month periods, investors’ patience is being seriously tested.”
IMA Global was the sector with the largest number of funds on the dog list with 20 funds, making up 40 per cent of the kennel and 16 per cent of funds in the sector.
The IMA North American sector had the second-largest number of dogs with eight, totalling 13 per cent of the sector. The North American sector’s worst offenders were led by the Investec American fund, which made a return of -26 per cent compared with the S&P 500 benchmark. Not a single Europe ex-UK or UK Equity Income fund was on the dog list.
Bestinvest has drawn attention to the fact previous “long-term offen-der” Scottish Widows Investment Partnership rarely features following its acquisition by Aberdeen Asset Management.
The worst-performing fund on the Spot the Dog list was the SF Webb Smaller Companies Growth fund, which made a relative return of 71 per cent over three years compared with its Numis Small Cap ex Investment Trust benchmark.
Investment Quorum chief executive Lee Robertson says: “From our perspective we do not pay much attention to these kind of lists, however if you are a direct investor, they can be useful as a rough guide though you should still be conducting your own research on top of this.
“With other lists there is an element of tongue in cheek because there are times when you have a list of poorly-performing funds and some of those funds are also on the same firm’s recommended buy list.”
Worst performing “dogs” by sector:
|Sector||Fund||Three-year return on £100||Relative three-year return %|
|UK All Companies||Swip UK Opportunities||101||-22|
|UK Smaller Companies||SF Webb Smaller Companies Growth||44||-71|
|Global Emerging Markets||FP Hexam Global Emerging Markets||64||-32|
|Asia Pacific||Martin Currie China||89||-14|
|Global||PFS Taube Global||97||-28|
|North American||Investec American||111||-26|
|Japanese||Schroder Japan Alpha Plus||96||-19|