The number of underperforming funds featured on Tilney Bestinvest’s ‘named and shamed’ list has increased by 46 per cent over a six-month period, new data has revealed.
The January 2016 edition of the UK investment group’s bi-yearly Spot the Dog report has identified 54 funds from a number of Investment Association equity sectors as underperforming – up from 37 funds in the last edition.
Meanwhile, the level of assets in the underperforming funds rose slightly to £18bn, from £17.6bn.
Aberdeen Asset Management topped the list with 11 underperforming funds, and a further seven funds are owned by Halifax, Scottish Widows, St. James’s Place and the Trade Union Unit Trust is also managed by the asset manager.
The fund house with the largest assets under management within ‘dog funds’ is M&G, for the third time running. M&G holds £6.4bn.
Tilney Bestinvest said that each fund featured met the strict criteria of being available to retail investors and failing to beat their benchmark over three consecutive 12-month periods and by 10 per cent or more over three years.
Jason Hollands, managing director at Tilney Bestinvest, said: “Spot the Dog is a reminder that not all investments turn out to be a resounding success – to put it politely – and a few can turn out to be disastrous. It is imperative to keep a close eye on your portfolio, periodically giving your investments a review.
“Do not assume that going with a big brand fund group is any guarantee of healthy returns – it isn’t.”
Adviser view
Frances Kemp, certified financial planner at Norfolk-based Nurture Financial Planning, said: “I suppose the more information that is made to advisers on investments can only be a good thing.
“To be honest, I do not think that advisers have the resources to thoroughly research every single fund available.”
