The number of funds that have consistently underperformed in the markets they invest in this year has risen by a third, new data has shown. This is partly due to the gulf between the performance of growth versus value and income funds, which has been exacerbated by the pandemic. And the difference in performance levels is striking. While the average fund in the IA Global sector posted a 32.4% return, the best performer managed to make a 162.6% return, and the poorest ended up down -9.6%. This highlights the need to be super selective when choosing a fund manager to look after your cash and once invested, how important it is to continue to regularly monitor your investments and check whether they are delivering value for money. Bestinvest’s Spot the Dog report, which has been exposing badly performing funds since it launched in 1994, named 119 market investment funds in its latest report, collectively representing £49.6bn in customer’s long-term savings. The research, which is released biannually, uses statistical fund performance data to identify funds that have performed badly compared to their benchmark. Fund giant Invesco retained the “top dog” spot for the sixth time in a row, with 11 funds worth £9.2bn of assets. Jupiter climbed up to second place, after acquiring Merian Global Investors last year, while St. James’s Place and Schroders came in third and fourth place, respectively. The highest count of consistent underachievers was found in the global equities sector, while North America had a prolific number of ‘dog’ funds at 21.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of February 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.