Fund managers running abysmally performing funds are responsible for more than £23bn in assets, according to wealth adviser Bestinvest's latest Spot the Dog report. However, the number of poorly performing funds has reduced from 113 to 64 since Bestinvest's last Spot the Dog report in summer 2012. These 64 represent £12.1bn of assets in eight fund sectors. In addition to this, among unit-linked pensions funds there are 89 poorly performing funds across six equities sectors with assets of £10.9bn.
To be on Bestinvest's Dog list, a fund must have underperformed its benchmark over three consecutive 12-month periods, and by 10 per cent or more over the three years to the end of 2012.
The fund sector with the largest number of poorly performing funds is North America with 18, representing 31 per cent of the sector. Many managers fail to beat the US market and means some investors prefer to use passive tracker funds such as exchange traded funds (ETFs) for US exposure (see our suggestions).