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Spot the Dog: 30 funds in Bestinvest's £33.6bn den of shame

Bestinvest's 'Spot the Dog' sniffs out and ranks asset management companies according to how much assets they have in 'dog funds'.

Fund management is a dog-eat-dog world, and the consequences for underperformance can be ruff – such as inclusion in Bestinvest's 'Spot the Dog' report.

The report doggedly evaluates UK open-ended funds to find the 'dogs' of each sector making a canine's dinner of things by underperforming their benchmarks by at least 5% for more than three 12-month periods.

The 'Spot the Dog' report then collars asset management companies according to the amount of assets they have in these bad boys.

Tilney identified 58 funds dog funds in this report, a sharp increase on the unusually low number of 26 funds that appeared in its last report at the start of the year.

The level of assets languishing in dog funds has risen even more dramatically, soaring from £6.4 billion at the start of the year to £33.6 billion. 

Read on to find out which 10 fund firms came bottom of the pack - who between them were responsible for 30 doghouse funds - and which holds the position of 'top dog'.

Fund management is a dog-eat-dog world, and the consequences for underperformance can be ruff – such as inclusion in Bestinvest's 'Spot the Dog' report.

The report doggedly evaluates UK open-ended funds to find the 'dogs' of each sector making a canine's dinner of things by underperforming their benchmarks by at least 5% for more than three 12-month periods.

The 'Spot the Dog' report then collars asset management companies according to the amount of assets they have in these bad boys.

Tilney identified 58 funds dog funds in this report, a sharp increase on the unusually low number of 26 funds that appeared in its last report at the start of the year.

The level of assets languishing in dog funds has risen even more dramatically, soaring from £6.4 billion at the start of the year to £33.6 billion. 

Read on to find out which 10 fund firms came bottom of the pack - who between them were responsible for 30 doghouse funds - and which holds the position of 'top dog'.

10. Columbia Threadneedle

Number of dogs: 2

Threadneedle UK Monthly Income (relative three-year return: -10%)

Threadneedle US Equity Income (relative three-year return: -8%)

Value of dogs: £590.1 million

Previous spot the dog ranking: 6

9. Artemis

Number of dogs: 1

Artemis UK Special Situations (relative three-year return: -8%)

Value of dogs: £901.4 million

Previous spot the dog ranking: N/A

8. Jupiter

Number of dogs: 4

Jupiter China (relative three-year return: -12%)

Jupiter Merlin Worldwide Portfolio (relative three-year return: -11%)

Jupiter Global Managed (relative three-year return: -10%)

Jupiter Global Equity Income (relative three-year return: -10%)

Value of dogs: £1 billion

Previous spot the dog ranking: 6

7. HSBC Investments

Number of dogs: 5

HSBC UK Focus (relative three-year return: -13%)

HSBC UK Growth & Income (relative three-year return: -12%)

HSBC Income (relative three-year return: -11%)

HSBC UK Freestyle (relative three-year return: -10%)

HSBC European Growth (relative three-year return: -10%)

Value of dogs: £1.6 billion

Previous spot the dog ranking: N/A

6. St. James’s Place

Number of dogs: 2

St James's Place UK High Income (relative three-year return: -19%)

St James's Place Ethical (relative three-year return: -13%)

Value of dogs: £1.5 billion

Previous spot the dog ranking: 4

5. Fidelity

Number of dogs: 3

Fidelity MoneyBuilder Growth (relative three-year return: -11%)

Fidelity American Special Situations (relative three-year return: -13%)

Fidelity Japan (relative three-year return: -11%)

Value of dogs: £1.8 billion

Previous spot the dog ranking: 2

What Bestinvest said: 

'Fidelity retains a top-five ranking, adding one more fund but over £800 million of assets since the start of the year.

'Fidelity Japan is a repeat offender from last time and, while Fidelity American has thankfully now escaped under a new master, it has handed over the baton to its close relative, the Fidelity American Special Situations fund, which is flagged by the firm’s online platform as a Select 50 top pick.

'The third incumbent is Fidelity MoneyBuilder Growth, which predominantly invests in large, UK blue chip companies.'

4. Aberdeen Standard Investments

Number of dogs: 5

Aberdeen Asia Pacific Equity (relative three-year return: -7%)

Aberdeen Asia Pacific & Japan Equity (relative three-year return: -6%)

Aberdeen World Equity Income (relative three-year return: -17%)

Standard Life Global Equity Income (relative three-year return: (-13%)

Aberdeen World Equity (relative three-year return: -12%)

Value of dogs: £1.9 billion

Previous spot the dog ranking: 1

What Bestinvest said:

'Aberdeen Asset Management, which merged with Standard Life in 2017, has been prominent in Spot the Dog in recent years, at one time having 11 funds included, so its retreat from the top slot will be relatively welcome news.

'Nevertheless, the number of Aberdeen Standard funds featured at five is the same as last time, despite all but one fund being different from those in the last edition.

'Frustratingly the level of assets has actually gone up and, on top of these own-brand funds, Aberdeen Standard has also been the underlying manager of two other funds in Spot the Dog, including the St. James’s Place Ethical fund from which its management contract has just been terminated.'

3. Janus Henderson

Number of dogs: 2

Janus Henderson European Selected Opportunities (relative three-year return: -6%)

Janus Henderson World Select (relative three-year return: -11%)

Value of dogs: £2.3 billion

Previous spot the dog ranking: 9

What Bestinvest said:

'Fund giant Janus Henderson, the result of a merger between UK firm Henderson and US manager Janus, has worked its way up the rankings from 9th to 3rd place in this edition, with two completely new incumbents in the kennel.

'These are Janus Henderson European Selected Opportunities, a former Gartmore fund which was many years ago one of the most popular European funds in the industry, and the much smaller Janus Henderson World Select fund.

'The Janus Henderson European Selected Opportunities fund is one of a number of funds managed by veteran manager John Bennett, whose long-term record has been strong but who has lagged over the last couple of years.'

2. JP Morgan Asset Management

Number of dogs: 1

JPM US Equity Income (relative three-year return: -6%)

Value of dogs: £3.5 billion

Previous spot the dog ranking: N/A

What Bestinvest said:

'JP Morgan owes its second-place ranking to a single but sizeable fund, the £3.47 billion JPM US Equity Income fund.

'In our view this is down to the income-seeking strategy being out of favour with market trends. In recent years the performance of the US market has been firmly led by ‘growth’ companies including the so-called FAANG technology and new media giants that include the likes of Facebook and Netflix.

'Tech shares now account for a quarter of the US market. The JPM US Equity Income fund has relatively low exposure to such companies and instead its brief is to focus on reliable, dividend-generating companies.

'However, in tougher market conditions this fund is likely to prove more defensive than most US funds.'

1. ('Top Dog') Invesco Perpetual

Number of dogs: 5

Invesco Perpetual UK Strategic Income (relative three-year return: -17%)

Invesco Perpetual Income (relative three-year return: -16%)

Invesco Perpetual High Income (relative three-year return: -14%)

Invesco Perpetual Income & Growth (relative three-year return: -8%)

Invesco Perpetual Japan (relative three-year return: -9%)

Value of dogs: £15.1 billion

Previous spot the dog ranking: N/A

What Bestinvest said:

'Respected fund group Invesco Perpetual has stormed in to take the top place in Spot the Dog with five funds in the hall of shame, having had no funds at all in the last edition.

'Unfortunately these include some seriously big beasts, meaning that when measured by fund size, Invesco Perpetual funds represent 45% of all the assets appearing in this edition.

'Three of these funds are run by UK equity manager Mark Barnett, who inherited the firm’s flagship UK equity funds when high profile manager Neil Woodford left to establish his own firm in 2014.

'Both Barnett and Woodford, who have broadly similar approaches, have had a torrid time over the last couple of years.'

 

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