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Dobell leads M&G out of Bestinvest's funds doghouse

M&G has reversed several years of sharp underperformance in its largest equity funds to escape Bestinvest's doghouse.

 
Dobell leads M&G out of Bestinvest's funds doghouse

M&G has finally escaped the doghouse in online stock broker Bestinvest's Spot the Dog study of underperforming funds.

Tom Dobell's (pictured) M&G Recovery , Jamie Horvat's Global Basics  fund and Stuart RhodesM&G Global Dividend  fund have all left the 'dog' list, made up of funds that have underperformed their benchmark over the last three years, and underperformed by more than 10% over that period.

A total of £11.9 billion was held in M&G 'dog' funds as recently as last June, according the previous Bestinvest Spot the Dog study.

That fell to zero in the second half of 2016, as the overall volume of UK wealth invested in 'dog' funds dropped from £18 billion to £8.6 billion held in 42 funds. 

The Global Equity sector had the largest number of dog funds at 15, with the North America sector holding nine funds. 

On the flipside there were no UK Smaller Companies funds in the Bestinvest report and across the UK All Companies and UK Equity Income there were just six funds, representing 1% of combined assets in the sector. Only one fund was identified in the Europe ex-UK sector. 

With the bounce in M&G’s performance, Schroders now accounts for the largest share of underperforming assets, although at 12.8% its relative position remains a fraction of M&G’s former 60%.

Its inclusion was wholly due to the performance of Andy Brough’s Schroder UK Mid 250  fund. A spokesperson for the group pointed out that longer-term the fund remained ahead of benchmark.

‘Underperformance over the last 12 months was due to a large exposure to domestic stocks, which suffered due to a result of the EU referendum, these are now recovering quickly as earnings and dividends come through as expected,’ they added.

The study also showed that Aberdeen held the highest number of underperforming mandates, with four on the list. This was down from 11 previously, however.

'While fund management companies like to push their star managers and the funds that happen to be doing well at the time, the reality is many of them will have skeletons in the closet that don’t get mentioned in advertising campaigns,' Bestinvest managing director Jason Hollands said. 

'When all is going well, funds are heavily promoted and managers are feted like City rock stars. Yet some of these stars may have simply got lucky and turnout to be shooting stars that crash out of orbit.' 

1 comment so far. Why not have your say?

FrankFrank

Feb 12, 2017 at 12:37

It is all due to luck gentle folks. The bright star funds today will be the dog funds tomorrow.

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  • Schroder UK Mid 250 Acc
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  • Andrew Brough
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  • Stuart Rhodes
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  • Jamie Horvat
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