Newly published research names and shames the funds which have failed to deliver for investors over three consecutive 12-month periods.

The latest ‘Spot The Dog’ report has identified 56 equity funds as serious and persistent underperformers – a 27% increase on 44 dog funds exposed in the last report in January 2023.

The amount of assets held in dog funds has more than doubled from £19.1 billion in the last report to £46.2 billion.

St James’s Place (STJ) dominates with six entries and no single fund manager came close to the wealth manager, which accounted 63% of the overall assets in dog funds. However, Artemis also holds £2.66 billion in dog funds, Scottish Widows has £2.1 billion, Columbia Threadneedle £1.92 billion and Abrdn (ABDN) £1.67 billion.

‘If there is a theme across the companies and strategies that have struggled, it is a quality bias. This has been a tough area of the market over the past three years, having fallen between the cracks of the various rotations between growth and value,’ noted the report, which is produced by Bestinvest.

The Global sector saw the highest number of dog funds overall, with 24 relegated to the doghouse, up from just 11 funds last time, representing 15% of overall assets in the sector. 

There are a few funds, however, which have ‘turned the corner’ since the last report and avoid the list this time round. Invesco has overcome problems with its UK equity franchise, for example, and Fidelity American (B8GPC42) has also improved its showing.

Japan, Smaller Companies and Emerging Markets are fund sectors with just one or two dogs, suggesting active fund managers can often do best in the less widely followed parts of the market. There were also no Global Equity Income funds on the list this year.

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