BestInvest calls out the top 5 worst performing asset management firms, with Invesco taking pole position for the sixth time running

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the funds must have underperformed the benchmark by 5% or more over the entire three-year period of analysis to make the list.

  • 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.
  • Visit the Business section of Insider for more stories.

Even the biggest names in asset management can get it wrong and BestInvest just called out some of the top losers.

In its twice-yearly ‘Spot the Dog’ report, the online investment service names and shames the top underperforming funds and firms, and Invesco has topped the list for the sixth time in a row.

“The top slot in Spot the Dog continues to be held by Invesco with 11 funds totalling £9.2 billion. Four of these funds are Tibetan Mastiff-sized beasts,” the report said.

However, the report, which doesn’t win any popularity contest among fund managers, does note that Invesco’s number of funds that made the list has fallen this time.

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”:

1. Invesco

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. Jupiter

The UK-based firm Jupiter leapt up the rankings from ninth to second place in this report following its July 2020 acquisition of Merian Global Investors, making it “rescue home for two sizeable beasts,” the note said

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 Place

St James’s Place’s (SJP) in-house fund range has frequently “lurked near the top spot in the hall of shame” and sits in third position with four funds totalling £4 billion, the report said.

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 Neil Woodford, escaping the shaming.

The SJP Global Smaller Companies fund was one of this edition’s biggest losers in the Global sector, coming fifth in that particular list and trailing the benchmark by -32%.

4. Schroders

Schroders 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 investing in the US, Europe and globally, struggled in the 2020 environment where ‘growth’ stocks significantly outperformed.

These growth sectors include technology and communications services which have been the biggest ‘COVID-winners’, like video-conferencing software Zoom and EV company Tesla.

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 Management

JPMorgan’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 Schroders, this could turn around if value sectors like Banks and energy – which are the main dividend payers – catch up on any economic recovery.

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HRH The Prince of Wales unveils new sustainability charter, backed by the likes of Bank of America and AstraZeneca

Prince Charles
Britain’s Prince Charles, Prince of Wales, delivers a speech at the World Economic Forum during the World Economic Forum (WEF) annual meeting in Davos, on January 22, 2020.

  • His Royal Highness The Prince of Wales announced Sunday the creation of the ‘Terra Nova’ – a charter giving businesses a roadmap to a more sustainable future.
  • The charter is backed by some of the world’s biggest businesses, including: Bank of America, BlackRock, Unilever, AstraZeneca and BP.
  • Prince Charles’ has also launched the new ‘Natural Capital Investment Alliance’ which aims to target $10 billion by 2022
  • Visit Business Insider’s homepage for more stories.

His Royal Highness The Prince of Wales has unveiled a new sustainability charter, named “Terra Carta,” backed by leading international businesses, including Bank of America, BlackRock, Unilever, AstraZeneca and BP.

The charter, designed by Apple’s former Chief Design Officer Sir Jony Ive, is a 10-point roadmap to 2030 for businesses, supporting the likes of the Paris Climate Agreement. With nearly 100 actions for businesses, the plan should act as a “basis of a recovery plan that puts Nature, People and Planet at the heart of global value creation,” according to a press release. Each actor was given a framework for their individual plans, it said. 

This publication is the latest endeavour by Prince Charles to support sustainable practices in the private sector, following his speech at Davos in January 2020 and the creation the Sustainable Markets Initiative.

“The ‘Terra Carta’ offers the basis of a recovery plan that puts Nature, People and Planet at the heart of global value creation – one that will harness the precious, irreplaceable power of Nature combined with the transformative innovation and resources of the private sector,” HRH The Prince of Wales will say at a One Planet Summit event.

Read more: Morgan Stanley picks the top 90 global sustainability stocks that will soar as economic recovery gets underway – including one with an upside of 137%

Read more: Lazard’s top ESG stock-picker outlines the 3-part strategy he’s used to beat 75% of his peers and smash his benchmark without paying Tesla-like prices

One of the initiative’s aims is to drive investment into Nature-based and engineered solutions that address the climate and biodiversity crises. To that end, Prince Charles’ SMI created the Natural Capital Investment Alliance, which seeks to increase natural capital allocation by $10 billion by 2022.

Natural capital is the term used to describe the stock of combined resources that make human life on Earth possible. For example, plants, animals, minerals, soil, air and water.

The alliance, founded alongside HSBC Pollination, Lombard Odier and Mirova, will also pursue natural capital investment through corporate offsetting and carbon pricing prospects.

Terra Nova’s supporters already include some of the biggest businesses in the world, with Brian Moynihan, Bank of America’s CEO and Chairman, calling it “a comprehensive roadmap for the private sector to help drive toward a sustainable future.”

“By aligning development objectives within our operating models the private sector can marshal the resources that will be needed to reach the development goals.  HRH Prince of Wales’s leadership and commitment has created a spirit of possibility that business leaders are proud to join,” he added.

Read more: Jessica Alsford built Morgan Stanley’s ESG research unit from the ground up. Here’s how she advises clients on using ESG in their portfolios – along with 4 sustainability trends to watch.

Read more: A Refinitiv research chief outlines 6 key investing themes that will drive markets in 2021 – and explains how you can capitalize on each within your portfolio

The charter’s commitments include:

  • Commit to rapidly accelerating the world’s transition towards a sustainable future.
  • Recognize that ensuring the integrity of all ecosystems, on land and under water, requires that climate, oceans, desertification and biodiversity be treated as one common system and addressed simultaneously.
  • Acknowledge that we need to make health our goal; individual health, community health, economic health and the health of our Natural resources (e.g. soil, air and water).
  • Recognize the importance of ‘local’ – local traditions and culture, local products, local jobs and local sustainability – and how these ‘locals’ connect and support each other in the wider tapestry of regional and global systems.
  • Acknowledge that Nature underpins the inherent prosperity, wellbeing and future of all people and the one planet we share.  Further, that the restoration of the natural world is of common benefit to all humankind irrespective of borders.
  • Acknowledge that the required global trajectory is a sustainable one, where the private sector has a critical role to play.  To accelerate along this trajectory, a ‘future of industry’ and ‘future of economy’ approach must be taken.
  • Take into account the need to ensure a skilled workforce and cadre of leaders that are prepared to participate in a fair, equitable and just transition towards a sustainable future.
  • Recognize that to scale sustainable solutions and investment, cross-border and longer-term ‘mega’ projects need to be explored underscoring the importance of public, private and philanthropic collaboration.
  • Acknowledge the need for net zero commitments to be achieved by 2050 or sooner.  Setting more ambitious timelines, such as 2035, emphasizes and catalyzes immediate action, continuous innovation and improvement.
  • Undertake to collaborate, share knowledge and ideas to propel the world towards sustainability at a faster pace through public, private and philanthropic collaboration.

Read more: What does the Democratic sweep actually mean for investors? We spoke to 5 investing experts to find out how to make the most of Biden’s blue Congress

Initial Supporters of the Terra Carta include: AstraZeneca, Fidelity International, Bank of America, freuds, Jony Ive/LoveFrom, Refinitiv, Manyone, Heathrow Airport, Coutts, IIGCC, HSBC, Schroders, EY, BP, Macquerie, State Street, Pollination, Lombard Odier, Mirova, Drax Group, Eurasia Resources Group, EFI, Compass Group, ReNew Power, Polymateria, CCm Technologies, Lanzatech.

 

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