Global funds in the dog house with 15 of 42 ‘dog’ funds: Bestinvest
The global funds sector has the largest number of underachieving funds, according to the latest ‘Spot the Dog’ fund list.
Of the 42 investment funds available to retail investors found to be “seriously underachieving”, 15 are from the Global sector, according to the report issued by fund research specialist and execution only online investment platform, Bestinvest. The area with the second highest manager failure rate is North America, with nine ‘dog’ funds, with the two sectors representing more than half of the ‘dog’ fund universe.
Looking at individual companies, ‘dog’ list regular M&G, which made up 60% of ‘dog’ assets in the last edition, has improved its performance to remove itself entirely from the list. Aberdeen remains prominent with four ‘dog’ funds, but is significantly down from a total of 11 from January 2016’s list, Bestinvest said.
The level of assets in the underperforming funds has also fallen to £8.6bn, less than half the number of assets in ‘dog’ funds than six months ago.
20 years of dogs
Bestinvest’s controversial report, which has been running for more than 20 years, “names and shames” investment funds (unit trusts and OEICs) from the Investment Association equity sectors, that have underperformed, meeting the criteria applied by Bestinvest of being available to retail investors and failing to beat their relevant benchmark over three consecutive 12-month periods and also by 5% or more over the full three year period.
The latest edition of Spot the Dog, which uses data up until 31 December 2016, ees a reduction in the three year underperformance threshold from 10% to 5%, as the report now analyses just commission-free share classes which have lower costs than those that were common place in the past.
With 15 funds from the Global equities sector, it remains the area with the largest number of dog funds, as it has been over the past 42 months. However although there are a number of funds included from the sector, a number of them are relatively small funds so only represent 4% of the assets in the sector.
Aberdeen ‘Top Dog’
Bestinvest said that while this edition there is no single fund group that dominates the hall of shame, however when ranked by number of funds in the report, the unwanted trophy of ‘Top Dog’ remains with listed fund giant Aberdeen Asset Management.