Finance

Invesco tops ‘dog funds’ list for sixth time

Invesco has topped a twice-yearly list of worst-performing investment funds for the sixth time running, with almost a dozen of the asset manager’s funds overseeing more than £9bn among the biggest laggards.

A ranking compiled by online investment company Bestinvest has identified two repeat Invesco offenders from previous rankings — Invesco’s UK Equity High Income and UK Equity Income funds, which have delivered -21% and -19% respectively over the past three years.

The Henley-based asset manager has undergone a shake-up in senior management over the past year, following the arrival of new chief investment officer Stephanie Butcher at the end of 2019.

Mark Barnett, one of Invesco’s best-known fund managers and a protege of former Invesco star stock picker Neil Woodford, departed in May after a 24-year stint. His departure was part of a review led by Butcher.

READ Invesco UK fund outflows widen to £4bn as performance woes prompt investor exodus

Despite coming top of the list again, Invesco fared better than six months ago when Bestinvest identified 13 underperforming funds managing more than £11bn.

A spokesperson for Invesco said: “Invesco as a global business has continued its strong growth over the last 12 months and finished 2020 with record assets under management of over $1.3tn.

“This report is a snapshot covering a specific time period and methodology. Our UK business has undergone significant and positive change across our product range over the past year to better align to client needs, whilst remaining true to our high conviction, engaged and disciplined approach to investing.”

The spokesperson added: “We have the investment expertise and experience across all major markets to continue to ensure our business remains innovative and competitive and we remain committed to supporting our clients with their investment goals and provide them with the best investment experience along their investment journey.”

Overall, Bestinvest identified 119 underperforming funds, managing £49.6bn between them. Funds that appear on its “Spot the Dog” list underperformed their benchmarks by 5% or more over the past three years, after fees.

Other asset managers singled out in Bestinvest’s ranking include Jupiter, which with eight underperforming funds overseeing £4.1bn put it in second spot.

READMark Barnett to leave Invesco after 24 years

The FTSE 250-listed asset manager leapt seven places up the ranking, after its acquisition of Merian Global Investors meant it took on more underperforming funds.

Jupiter UK Growth and the Jupiter Growth & Income funds were among those singled out for poor performance, returning -23% and -12% respectively over the past three years.

Jupiter was contacted for comment.

Meanwhile UK wealth manager St James’s Place finished third in the ranking with just over £4bn sitting in funds that have failed to beat benchmarks.

The St James’s Place Global Equity and SJP Global Smaller Companies funds were among the poor performers cited by Bestinvest, returning -13% and -32% respectively over a three year period.

A spokesperson for SJP said: “Clients invest with St James’s Place for 14 years on average and typically do so in tailored portfolios comprising between six and 10 of our funds.

He added: “When assessing performance, it’s important to do so on a like-for-like basis. St James’s Place fund performance is shown net of all charges, including ongoing advice and administration, and therefore these analyses do not make accurate like-for-like comparisons.”

Jason Hollands, managing director at Bestinvest, said investors with money in funds that repeatedly underperform should look to move their saving elsewhere.

“The differences between the best and worst performing funds are enormous and so it is essentially to choose funds very carefully and then keep a beady eye on them or opt for low-cost trackers instead. The latter won’t beat the returns of market but will closely mimic them,” said Hollands.

To contact the author of this story with feedback or news, email David Ricketts

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