The level of assets in ‘dog’ funds – those that have underperformed for three consecutive years and by more than 10% – dropped from six months ago to from £23bn to £17.6bn.
The number of funds on the list fell from 60 to 37.
The Global and Global Equity Income sectors were home to the most number of dog funds, 13, though from a group level it was Aberdeen which accounted for the most funds, eight, including two run by its highly regarded Asian equities team, £1.7bn Asia Pacific Equity and £189m Asia Pacific & Japan Equity funds.
“We believe this in part reflects the funds’ relatively conservative positioning in companies with strong corporate governance practices and their heavy underweight to China relative to the benchmark,” the report read.
“The funds are also underweight India, relative to peers – this market rallied sharply in 2014, helping the one and three years’ returns of peers heavily exposed to Indian businesses.”
Tom Dobell’s £4.8bn M&G Recovery and Randeep Somel’s £5.4bn M&G Global Basics together accounted for 41% of all the dog fund assets listed, with their underperformance attributed both to poor stock selection and sector allocation decisions.
