BestInvest calls out the top 5 worst performing asset management firms, with Invesco taking pole position for the sixth time running
- BestInvest, an online investment platform, just released their twice-yearly "
Spot the Dog" report.
- The report analyses the worst-performing funds across different sectors.
- These are the five firms that had the most assets under management in the list.
Even the biggest names in asset management can get it wrong and
What is a 'dog fund'?
So how does BestInvest identify the funds that fall into this somewhat cruel category using two filters?First, it filters by fund universe to identify "those that have failed to beat the benchmark over three consecutive 12-month periods," the report said.
The benchmark chosen by BestInvest is determined by the sector the fund, designating one that operates in an index that "represents the overall movements in the market that the fund operates in," it said.This highlights those that have consistently underperformed and allows the research to remove those that "may simply have had a short run of bad luck," it added. Secondly, the funds must have underperformed the benchmark by 5% or more over the entire three-year period of analysis.
The Kennel Club
These are the firms with the most assets under management, which made the list because of their "dog funds":
For the sixth time running, Invesco has landed the top "dog" spot, with 11 funds making the list, worth £9.2 billion in total. Admittedly, this is down from 13 funds valued at £11.4 billion from the last report.Two of the firm's funds were repeat offenders on the list: Invesco's UK Equity High Income and UK Equity Income funds, delivering -21% and -19% respectively over a three year period compared to the benchmark.
But, in the firm's defence these funds were only recently handed to new managers, "who are now tasked with turning them around," the report said.
Moreover, Invesco has gone through a broad shakeup over the last year after the appointment of a new chief investment officer, Stephanie Butcher."This is clearly a work in progress," the report added.
2. JupiterThe UK-based firm
The now enlarged group oversees 8 "dog funds", totalling £4.1 billion of assets. The biggest of these is the Merian North American Equity fund, which has seen a -14% return in the last three years compared to the benchmark.
3. St. James PlaceSt James's Place's (
The number of SJP funds that made this edition has halved since the last with the SJP UK High Income fund, previously managed by fallen star
4. SchrodersSchroders took this edition's fourth place after it number of funds to make the list rose to 11, with an increase of £4 billion in asset.
Three of the Schroder's included are managed by its QEP team, the report highlight, who use a "systematic, data driven investment process."
Both the Schroder European Recovery and Global Recovery funds - which target undervalued companies - made the list, underperforming the benchmark -22% and -33% respectively. These, and the firm's income funds
Therefore, growth strategies largely left funds targeting undervalued companies or dividend-generating businesses lagging in the dust during 2020.
However, if the global economy recovers as most banks are forecasting, these 'recovery' or 'value' plays could catch-up, making significant gains.Of note, the report excluded the £3.3 billion 'dog fund' managed by the firm in its joint venture with Lloyds Bank.
5. JPMorgan Asset ManagementJPMorgan's inclusion in the top five came down solely due to the JP Morgan US Equity Income fund with its huge £3.2 billion in AUM, which fell -27% below the benchmark, the report said.
Unfortunately for JPMAM, the fund has been underweight technology stocks in a period when companies like FAANG and tech cult names like Tesla have been market leaders, as many tech companies do not pay dividends.But, like
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