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