Bestinvest’s latest ‘Spot the Dog’ report has named and shamed 137 funds for underperforming their benchmarks, representing a total of £53.42 billion in investors’ assets.
This marks a slight improvement from the 151 funds identified in the previous edition but remains significantly higher than the 56 funds highlighted a year ago.
Bestinvest evaluates funds based on their performance over a three-year period, requiring funds to have underperformed their benchmark for three consecutive 12-month periods and by at least 5% overall.
Its analysis covers various sectors, with global equity funds being the hardest hit, comprising 43 of the total dog funds and accounting for £26.14 billion in assets.
Among the notable funds in the doghouse are St. James’s Place Global Quality, which alone holds £10.7 billion, and Fidelity Global Special Situations.
The UK has seen its share of underperformers, with 44 UK-focused funds making the list, including those in the UK All Companies and UK Smaller Companies sectors, holding a total of £11.14 billion.
Sustainable and ethical funds, which have struggled due to a lack of exposure to energy stocks, are disproportionately represented on the list.
Jason Hollands, managing director of Bestinvest, said: “The high number of funds badged variously as sustainable or responsible that feature in the latest Spot the Dog report is likely in part down to the stellar performance of oil and gas stocks in 2021-22.
“Over the three-year period covered in our latest report, the MSCI World Energy Index delivered a total return in GBP of 98%***, well ahead of the MSCI World Index total return of 28%.
“Compare this to the alternative and renewable energy market, which fell out of favour during the post-pandemic surge in energy demand, and the story is very different; The MSCI Global Alternative Energy Index declined by 38% over the same three-year period highlighting why managers focused on green energy have had it hard.
“However, we expect the number of ESG funds to reduce in the next couple of reports as the effect of surging energy stocks drops out of the data.”
Which UK funds are in the doghouse?
UK All Companies Dogs:
- L&G Future World Sustainable UK Equity Focus
- Liontrust UK Ethical
- Fidelity UK Opportunities
- CFP SDL UK Buffettology
- TM CRUX UK Special Situations
- Liontrust Sustainable Future UK Growth
- Unicorn Outstanding British Companies
- VT Sorbus Vector
- Rathbone UK Opportunities
- EdenTree UK Responsible and Sustainable Equity
- AXA Framlington UK Sustainable Equity
- SVM UK Opportunities
- Ninety One UK Sustainable Equity
- M&G UK Sustain Paris Aligned
- AXA Framlington UK Select Opportunities
- IFSL RC Brown UK Primary Opportunities
- CT UK Sustainable Equity
- Jupiter UK Mid Cap
- IFSL Avellemy UK Equity
- Trojan Income
- Schroder Sustainable UK Equity
- CT Responsible UK Equity
- Aviva Investors UK Listed Equity Unconstrained
- CT UK Mid 250
- abrdn (Lothian) UK Equity General Trust
- CT UK Institutional
UK Equity Income Dogs:
- Premier Miton UK Multi Cap Income
- abrdn UK Income Unconstrained Equity
- VT Downing Small & Mid-Cap Income
- HL Select UK Income Shares
- abrdn UK Income Equity
- Jupiter Responsible Income
UK Smaller Companies Dogs:
- Premier Miton UK Smaller Companies
- FP Octopus UK Micro Cap Growth
- IFSL Marlborough UK Micro Cap Growth
- Ninety One UK Smaller Companies
- Aviva Investors UK Smaller Companies
- WS Amati UK Listed Smaller Companies
- Jupiter UK Smaller Companies
- IFSL Marlborough Nano Cap Growth
- Royal London UK Smaller Companies
- Schroder UK Dynamic Smaller Companies
- CT UK Smaller Companies
- L&G UK Smaller Companies Trust
