The latest Spot the Dog report from online investment service Bestinvest has identified 137 consistently underperforming equity funds, holding a total of £67.44bn in investor wealth.
While the number of ‘Dog’ funds remains unchanged from the last edition, the level of assets held by these underperforming investments has surged by 26%, rising from £53.42bn.
Published twice a year, Spot the Dog tracks funds that have underperformed their market benchmark over three consecutive years by at least 5%.
The latest analysis covers the period ending 31 December 2024. Here are some of the key takeaways:
- 137 funds are classified as ‘Dogs’, unchanged from the previous edition.
- The total assets held in underperforming funds increased 26% to £67.44bn.
- Global equity funds dominate the list, with 44 funds holding £35.16bn in assets.
- UK Smaller Companies had the highest proportion of underperformers, with 11 funds accounting for 28% of the sector.
- 15 large funds (‘Great Danes’) hold 60% of all underperforming assets, a sharp rise from the last report.
- ESG funds remain highly represented, making up a quarter of the underperforming funds, reflecting broader market challenges for ethical and sustainable investing.
ESG funds struggle amid market shifts
One notable finding is that 25% of the poorly performing funds are labelled as sustainable, responsible, ethical or impact investments (ESG).
This reflects the broader market challenges faced by ESG-focused investments, which have struggled against the soaring performance of traditional energy stocks and the declining returns in renewable energy.
Jason Hollands, managing director at Bestinvest, explained: “The financial markets have been unsympathetic to ESG-focused funds in recent years, largely due to the sharp rise in energy prices and weak returns from renewable energy stocks in 2023 and 2024.
“Over the last three years, the MSCI World Energy Index delivered a total return of 71.3% in GBP, significantly outpacing the MSCI AC World Index’s 28.6% return.
“By contrast, alternative energy stocks have suffered. The MSCI Global Alternative Energy Index fell by -48.8% over the same period, making it clear why funds focused on green energy have faced difficulties.”
Global funds dominate the list of underperformers
Global equity funds account for the largest portion of underperformers, with 44 funds holding £35.16bn in assets making the list – the same number as in the previous report.
However, the worst-performing sector in terms of percentage impact was UK Smaller Companies, where 11 funds accounted for 28% of the sector’s assets.
The list also highlights the growing presence of large underperforming funds, with 15 ‘Great Dane’ funds (each over £1bn in size) making up 60% of total lagging assets – up significantly from 10 large funds in the previous report.
These 15 funds alone account for £40.14bn in underperforming assets, up from £26.81bn last year.
Top 10 worst-performing dog funds overall
| Fund | IA Sector |
Size (£bn) |
Value of £100 invested after 3 years | 3-year under performance (%) versus benchmark | |
| 1 | Artemis Positive Future Fund | Global | 0.01 | £66.72 | – 63% |
| 2 | Baillie Gifford Global Discovery Fund | Global | 0.43 | £54.17 | – 56% |
| 3 | Baillie Gifford Japanese Smaller Companies | Japan | 0.14 |
£63.76 |
– 49% |
| 4 |
Aegon Sustainable Equity |
Global |
0.17 |
£81.39 |
– 49% |
| 5 |
L&G Future World Sust UK Eq Foc |
UK All Companies |
0.02 |
£72.28 |
– 47% |
| 6 |
FP WHEB Sustainability Impact |
Global |
0.58 |
£83.73 |
– 46% |
| 7 |
SVM World Equity |
Global |
0.06 |
£83.95 |
– 46% |
| 8 |
AXA ACT People & Planet Equity |
Global |
0.03 |
£86.33 |
– 44% |
| 9 |
Heriot Global Smaller Companies |
Global |
0.02 |
£86.82 |
– 43% |
| 10 | AXA ACT Framlington Clean Economy | Global | 0.05 | £88.69 | – 41% |
Source: Spot the Dog, February 2025
Performance figures shown are net of fees with income reinvested.
Top 10 biggest beasts by size
| Fund | IA Sector | Size (£bn) | Value of £100 invested after 3 years |
3-year under performance (%) |
|
| 1 |
SJP Global Quality Fund |
Global | 9.43 | £104.45 | -26 |
| 2 | SJP Sustainable & Responsible Equity | Global | 5.27 | £106.36 | -24% |
| 3 | Fidelity Global Special Situations | Global | 3.32 | £116.19 | -14% |
| 4 | Liontrust Special Situations | UK All Companies | 2.70 | £97.11 | -22% |
| 5 | WS Lindsell Train UK Equity | UK All Companies | 2.67 | £100.62 | -18% |
| 6 | Fidelity Asia | Asia Pacific Excluding Japan | 2.37 | £94.57 | -12% |
| 7 | JPM Emerging Markets | Global Emerging Markets | 2.24 | £87.23 | -15% |
| 8 | BNY Mellon Long-Term Global Equity | Global | 2.14 | £114.13 | -16% |
| 9 | Janus Henderson Global Sustainable Equity | Global | 1.95 | £110.81 | -19% |
| 10 | CT American | North America | 1.79 | £125.36 | -11% |
Source: Spot the Dog, February 2025
Performance figures shown are net of fees with income reinvested.
Impact of market trends on fund performance
Hollands notes that some funds have struggled due to their limited exposure to high-growth technology stocks, particularly in the US.
“We cannot ignore the influence of the so-called ‘Magnificent Seven’ – a group of dominant US tech stocks including Nvidia, Alphabet (Google), Amazon, Meta (Facebook), Microsoft, Tesla and Apple.
These stocks helped fuel the AI boom at the end of 2023 and into early 2024, driving the US stock market higher. Many global and US equity funds that were not fully exposed to these companies found it difficult to keep up with market gains.”
A warning for investors
Bestinvest’s Spot the Dog report serves as a reminder to investors to regularly review their portfolios and assess fund performance.
While the report is not a definitive ‘sell’ list, it highlights the importance of active portfolio management to ensure investments remain aligned with financial goals.
Hollands advises: “Actively managed funds can underperform for many reasons, from poor decision-making to shifts in market conditions.
“Investors must distinguish between short-term underperformance and deeper structural issues within a fund. It is crucial to find skilled fund managers who can deliver long-term value and justify their fees.”
“With the ISA deadline approaching, now is an ideal time for investors to review their portfolios. Before adding new funds, it’s important to assess what they already own and whether any adjustments need to be made.”
The full report can be downloaded here for free.
