Robin Geffen’s Neptune boutique and Europe’s largest listed fund house, Aberdeen, have dominated the latest Spot the Dog list of shame.
The guide, which is produced by fund broker Bestinvest, aims to identify the equity funds that have consistently underperformed during the previous three years.
Nine Aberdeen funds have been highlighted in the guide, along with five Neptune funds – making the two firms the clear winners in the ‘dog fund’ stakes in the latest report.
Three of the Aberdeen funds were inherited through the firm’s recent acquisition of perennial laggard Scottish Widows Investment Partnership. The others look to have been caught in a broader lull in Aberdeen’s equity performance of late.
Bestinvest said three of Aberdeen’s dog funds were global equity products and that the firm had recently held small US equity weightings in the funds – a questionable call as the US stock market blasted away the competition last year.
Neptune’s dog products’ combined assets are just £555m – most of which is within Rob Burnett’s Neptune European Opportunities fund.
The manager performed strongly in the half decade after taking over the fund in 2005, but he has struggled to beat his benchmark more recently and he was also named in Spot the Dog in 2013.
The other four Neptune funds cited in the report were Global Special Situations, Emerging Markets, European Income and US Income.
A spokesperson for Aberdeen Asset Management said all funds go through periods of poor relative performance. “Unfortunately, ours are no different,” he said.
“The wrong thing to do would be to panic. Instead, we’ll continue with the process that has served well since the early 1990s. We’re invested in some good quality firms, which we believe have the potential of performing well over the long term.”
Elsewhere, BNY Mellon subsidiary Newton saw its flagship £4.4bn Global Higher Income fund named in the Spot the Dog guide.
The fund has been managed by James Harries since 2005 and is one of the dominant players in the global equity income fund universe. But it has struggled to outperform of late.
Bestinvest said the fund’s underperformance had come from “a more cautious approach by the manager at a time when developed markets, notably the US, surged to new peaks”.
However, the fund had only modestly underperformed its peer group during the past three years, the company said.
Newton said the performance of Mr Harries’s fund “has improved recently” and it backed the fund’s strategy to target companies best able to “weather low economic growth and heightened volatility to deliver a sustainable income”.
To qualify for the ‘doghouse’, funds must have underperformed their index for the past three consecutive years – to the end of 2014 in the current report.
The funds must also have underperformed their indices by more than 10 per cent cumulatively across that period.
M&G Investments retains the top spot of asset managers ranked in terms of the total assets held in dog funds.
While the firm only has two funds in the doghouse – Recovery and Global Basics – combined they have assets of just less than £8bn.
Managers Tom Dobell and Randeep Somel have so far been unable to perform strongly enough to exit the list.
