The Spot the Dog study, which names and shames the worst-performing vehicles over nine key sectors, found that £23.2bn of UK investors’ money is sitting in dog funds – a rise of 74 per cent since the last report in November 2010.
Further, while stock markets traded in a narrow range between November 2010 and June this year, the number of dog funds rose to 94 from 90. Funds in the IMA Global sector were among the worst performers, with 27 dog funds identified – up from just 11 funds in 2010. The sector was a best seller in June, according to industry body the Investment Management Association (IMA).
Fidelity is named as the worst fund management group in the study, with £3.4bn of its assets under management in dog funds. The main culprit is Sam Morse’s £3.1bn Fidelity European fund, along with Fidelity American Special Situations, meaning 22 per cent of Fidelity’s funds by value are now classed as dog funds.
Performance of funds over 3-yrs
Source: FE Analytics
Our data shows the US fund returning 4 per cent over the past three years, while the European vehicle lost more than 9 per cent.
Newton is also in the doldrums: £2.1bn is in dog funds, particularly Jonathan Bell’s £1.3bn Newton International Growth fund. 19 per cent of Newton’s AUM are in dog funds.
The poor performance of Mark Lyttleton’s BlackRock UK Dynamic and BlackRock UK funds have pulled the investment giant onto the dog list.
"Lyttleton performed well enough prior to the financial crisis, but his UK funds have since fallen off a cliff," said Adrian Lowcock, senior investment adviser at Bestinvest.
"They are close to being the very worst performers of all the 94 dog funds in this year’s report."
Performance of funds over 3-yrs
Source: FE Analytics
Both funds have lost almost 9 per cent over the past three years.
Schroders and Scottish Widows/SWIP were also in the firing line. Schroders has moved down from third to fourth place in the report. Schroder UK Mid 250 is the worst culprit at the house, with £1.6bn under management.
Scottish Widows/SWIP is the worst repeat offender in the fund management industry, but fell from second to fifth place. It has over a quarter of its assets – 27 per cent – in dog funds.