puppy with paws on benchBy Rachel Efetha, Chartered Financial Planner

Execution Only Investments giant, Bestinvest, has published it’s latest six-monthly ‘Spot the Dog’ list.

To make it onto the list, a fund must underperform the market by 5% after fees over three years.

There are 150 funds on this list, but here are just the worst 18.

Fund  Size  Sector  3-year under-performance
Invesco High Income £3.1bn UK All Companies -26%
Scottish Widows MM International Equity £3.0bn Global -13%
SJP Global Equity £2.4bn Global -16%
Fidelity Special Situations £2.2bn UK All Companies -9%
HL Multi-Manager Income & Growth trust £2.0bn UK Equity Income -12%
Halifax UK Equity Income £1.7bn UK Equity Income -7%
Invesco Asian £1.5bn Asia Pacific -7%
Invesco European Equity £1.5bn Europe -21%
Invesco Income £1.4bn UK All Companies -26%
Artemis Global Income £1.4bn Global Equity Income -31%
SJP Global £1.3bn Global -29%
Dimensional Emerging Markets Core Equity £1.3bn Global Emerging Markets -9%
Jupiter Income trust £1.2bn UK Equity Income -12%
M&G Recovery £1.2bn UK All Companies -17%
Man GLG Japan Core Alpha £1.2bn Japan -28%
SJP UK High Income £1.1bn UK Equity Income -26%
Invesco Global Equity £1.1bn Global -28%
Dimensional International Core £1.0bn Global -12%

Source: Bestinvest

There are three points I would like to make about this list

1 The Need for Diversification

Not one of these companies on the list are in a multi asset sector, meaning that they are exposed to just one geographical sector or one asset type.  In a well-balanced portfolio containing funds from other geographical areas and a mix of commercial property and bonds with the equities, then these significant falls may be offset by gains elsewhere.

Anstee & Co always recommend multi-asset funds which contain a blend of different asset types and geographical areas with the overall fund manager making the day to day decisions of where to put your money and in our view, this is the best solution for our clients.

2, The Need for Regular Reviews of your investments

Investments logoIn a past role, where we did recommend individual funds as part of a well-balanced portfolio rather than multi-asset funds, I have recommended five of the above funds as they were consistently outperforming the market over the previous five years.  However, not one of my clients remains invested in those funds because I spotted a downward decline and recommended action to switch out of them a long time ago.

We recommend that all investments are reviewed by an Independent Financial Adviser at least once a year.

3, The Need for Independence

Invesco appears five times in the above list, but it manages well over 100 funds, so the law of averages says that some are going to be good and others not so good.  An Independent Financial Adviser may well recommend one of Invesco’s better funds to you but look at another fund manager for UK, European and Global Equities where they currently have problems.

St. James’s Place (SJP), on the other hand, has three funds in the above list, out of a total of just 39 funds that they offer.  SJP funds are recommended by their advisers who can only recommend SJP funds, so if you need some Global or UK Equity exposure in your portfolio, you have no choice but to invest in a dog fund.

How Anstee & Co can help you with your investments.

We are a firm of Independent Financial Advisers (IFA’s). This means that the financial advice we give is unbiased. If you feel that your investments could do with a review, why not contact us today. The initial “getting to know you” meeting is at our expense and without obligation.

call back logo for an investmentsOur offices are located at: –

  • Kettering, Northamptonshire
  • Stamford, Lincolnshire
  • Towcester, Northamptonshire
  • London, Pall Mall, Greater London

Due to the present government guidelines regarding social distancing, we are now making use of video conferencing facilities such as: –

  • Zoom
  • Microsoft Teams
  • Skype
  • Facetime

We can also arrange a conference telephone call. There is no need to visit an office as all the work can be handled remotely. Our wealth management team is looking forward to helping you with your financial planning.

If you have any thoughts or comments about this article, “‘Spot the Dog’ of Investments”, then we would love to hear from you.

Financial Conduct Authority regulates investmentsFinally, the information contained in this article is for information purposes only and does not constitute financial advice. No action should be taken based on this information alone. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).