Spot the Dog report outlines the worst-performing investment funds 
(10/11/2009)
Bestinvest has announced the latest set of results from its Spot the Dog report, which outlines the worst-performing or ‘dog’ funds in the investment universe. The report reveals a huge rise in ‘dog’ funds – almost doubling from £7.2 billion on 31st December 2008 – to an immense £14.22 billion up until the 30th September – an increase of 196%.
The study, which is compiled biannually by Bestinvest’s in-house research desk, details the funds that have performed well below their recognised benchmark. The good news is that the number of overall dog funds has fallen from 82 to 78 and dog funds now account for 11.6% of the funds universe compared with 12% earlier this year.
However, the bad news is that the worst performers have been the bigger funds where UK investors have a higher proportion of their cash invested.
The worst five fund management groups by ‘dog assets under management’ are:
1. Jupiter (£2970m) – With nearly £3 billion of assets under management, Jupiter enters the table in the embarrassing top spot. A dog candidate last year, their official appearance as a dog is down to the performance of just one fund - Jupiter Income.
2. Schroders (£1762m) – The Schroder European fund continues to disappoint and the inclusion of Andy Brough’s UK Mid 250 fund has caused a 591% rise of Schroder assets under management in the dog house;
3. Scottish Widows / SWIP (£1677m) – The value of it’s dog funds has risen to £1.677 billion (over 25% of the group’s entire funds). This is caused by equity income funds entering the doghouse, as well as a range of Japanese and emerging market funds making a reappearance;
4. St James’s Place (£945m) – A new entry! In January this year, it had no dogs, now two of its eight funds qualify, representing around 33% of assets under management. Management was outsourced to Taube Hodson Stonex. Founded by Nils Taube, John Hodson, Cato Stonex, the company has suffered, following the passing of Nils Taube, aged 79 in March 2008.
5. Henderson New Star (£705m) – At the time of the last Spot the Dog Guide, the merger of Henderson New Star was still being completed. The combined group ranks 5th in the dog house league of fund management groups – the same as in January 2009. The merger appears to be progressing well and Henderson has halted the poor performance at New Star. However, right now, three of their own funds have entered the dog house compared to just one previously;
Adrian Lowcock, Senior Investment Adviser at Bestinvest, says: “Big funds have returned to the dog house in the latest report. The largest dog fund, Jupiter Income, has assets under management of £2.8 billion. Equity income funds also feature more heavily in the figures, as they haven’t benefited from the market rally which began in March. The upturn was driven by recovering banking stocks, many of which no longer pay a dividend. The holdings had to be sold in 2008 and will not reappear until they can reinstate the dividend. Our latest report highlights the huge number of assets being held in dog funds and illustrates just how vital it is that investors review their portfolios regularly to ensure they are getting the best possible returns.”
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