Equities  

Swip and Jupiter funds named in Bestinvest ‘dog’ list

Scottish Widows Investment Partnership (Swip) has again dominated Bestinvest’s bi-annual ‘Spot the Dog’ list of underperforming funds.

The list highlighted 64 IMA sector funds which have underperformed their benchmarks and for the first time contained funds from Jupiter Asset Management and Baillie Gifford.

Bestinvest acknowledged measures taken by Swip to improve fund performance - which included a major overhaul of its equity desk and the adoption of quantitative investment strategies for many of its funds - but said it would “take time for the results to come through”.

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Swip’s ‘dog’ funds as highlighted by Bestinvest included Nick Millington’s £1.4bn Scottish Widows UK Growth fund, as well as two UK equity funds run by James Clunie.

In spite of his funds’ underperformance Bestinvest said Mr Clunie’s long-short Swip UK Flexible Strategy fund was “showing signs of stardom”.

Jupiter’s £179.2m China fund, managed by Philip Ehrmann, ranked bottom of the IMA China/Greater China sector in the three years to January 25, according to FE Analytics.

Mr Ehrmann’s focus on small caps meant the fund lost 2.6 per cent compared with its peer group’s 12.7 per cent average return. However, shorter term performance has been much stronger with the fund up 28.1 per cent in six months compared with the sector’s 22.8 per cent average gain.

The other Jupiter fund highlighted by Bestinvest was Charlie Thomas’s £341m Ecology fund, which returned 16.5 per cent in three years compared with the IMA Global sector’s average 25.9 per cent gain.

However, Bestinvest admitted that the fund’s niche mandate - which involves a bias towards industrial companies supplying new technology in the environmental space - meant inclusion in the Spot the Dog list was “a little unfair”.

Bestinvest highlighted Baillie Gifford’s £600.4m Emerging Markets Growth and £468.7m Emerging Markets Leading Companies had suffered underperformance, as well as its £20.2m Greater China fund.

Both emerging markets portfolios ranked in the bottom quartile of the IMA Global Emerging Markets sector in one and three year periods to January 25. The funds have also underperformed in the course of five years. The Greater China fund also significantly underperformed its sector average.