The bi-annual study revealed £9.24bn of UK investors’ money is sitting in the poorest performing funds across nine key sectors, which represents a marked improvement in the £13.78bn held in them when the report was last published in August 2011.
The number of dog funds has also fallen from 94 to 44, with the North America Sector and Global Emerging Markets Sector hosting no dog funds, while Europe and Global funds also showed steps in the right direction.
On the other end of the spectrum, however, the UK Equity Income and Smaller Companies Sectors both showed increases in the number of dog funds.
Dog fund credentials
To be classed as a dog fund, the fund must underperform its benchmark in each of the past three years and by at least 10% over the past three years cumulatively. The second qualifying credential is used to weed out tracker funds.
With £2.8bn in dog funds, SWIP topped the table of dog fund providers, with its AUM in poorly performing funds increasing from £1.54bn (or fifth place) in August. A slight silver lining is that while the company has a quarter of its assets in the dog house, this is down from 27% last time round, and its number of dog funds has dropped from six to four.
Next up M&G has £1.19bn in dog funds, representing 6% of its AUM, with the M&G Dividend Fund responsible for its rise up the list from sixth place last time round.
Schroders took the bronze medal, moving up from fourth place in August’s edition, with its Andy Brough’s Schroder UK Mid 250 the only fund to have its fifth consecutive dog listing. Bestinvest said juding by the fund’s shrinking size, it seems the message is filtering through, as it is down from £1.6bn to £1.17bn – a 27% drop in AUM.
Standard Life surged up the list from 11th place in the previous edition to fourth in this one, with only one fund to blame – the Standard Life UK Equity High Income, which represents 23% of AUM at the firm at £730m.
Finally St James’ Place rises from tenth to fifth on the list, despite a reduction in the group’s total dog assets under management of £343m to £477m. It also has only one guilty culprit – The St James Place International Fund, representing 12% of the firm’s AUM.
