AN ANALYSIS published this week highlights how many investors are willing to leave their money festering in underperforming funds. Bestinvest’s regular Spot the Dog survey finds that there are 149 “failing” trusts, accounting for £15 billion of savings. To qualify for a dog-tag, a fund must have underperformed its benchmark for each of the past three years and lag that benchmark by at least 10 per cent.
Aberdeen Asset management, the investment group at the centre of the split capital investment trust scandal, has three UK funds, Blue Chip, UK Growth and UK Mid-cap, in the investment doghouse.
The biggest woofer of all is Abbey National’s UK Growth, weighing in at £1.2 billion. Other large funds include Invesco Perpetual European Growth, once the biggest fund in the industry but now measuring a more modest £925 million.
In the bond sector, the only notable hound is the Norwich Monthly Income Plus, another former star. After an interminable restructuring, Mark Gull, the manager, appears at last to be turning around the performance.
Bestinvest emphasises that a dog fund is not an “automatic” sell — many funds have clawed their way out of the kennel. But a presence in the list should certainly give investors pause for thought.
Advertisement
Richard Miles