The worst performing funds will earn £463m in fees this year even if markets are flat, a new report has warned.
Savers have £45bn invested with Britain’s worst fund managers, who have failed to beat their benchmarks over a three-year period despite their high charges.
Broker Bestinvest’s “Spot the Dog” study, which names and shames funds that return substantially less than their benchmarks, found wealth manager St James’s Place and fund groups Jupiter and Abrdn had the highest number of poorly performing funds.
Each had six funds in Bestinvest’s list of 86 “dogs”. This was up from 77 when the study was last published in August. However, new entrants hold a significant amount of savers’ cash, and the total amount invested in “dog funds” rose to £45bn from £30bn.
Overall, SJP’s poorest performers handled £5.7bn. The largest of its dog funds was the £2bn Global Equity fund, which charges 1.75pc. Bestinvest noted that St James’s Place accounted for six out of the top 10 most expensive poor performers. Jupiter declined to comment.
A spokesman for SJP said: “Last year we continued to take steps to future-proof the performance of our funds and portfolios. This includes merging funds, introducing over a dozen new fund managers and removing risks by pairing managers with complementary styles.”
A spokesman for Abrdn said: “Four of the funds are income strategies. This style has not beaten the market average over the past five years. Performance of our ASI World Income Equity and ASI UK High Income Equity funds has shown some encouraging signs of improvement. Both are in the top quarter of their sectors over the six months to end January 2022.”
The largest “dog” funds were the £3.9bn JP Morgan US Equity Income and the £3.5bn BNY Mellon Global Income fund. They lagged benchmarks by 32 and 26 percentage points. JP Morgan declined to comment.
