The amount of money that private investors have locked away in poorly performing “dog” funds has risen nearly fourfold in the past 18 months to more than £12 billion.

The latest “Spot the Dog” guide, released yesterday by Bestinvest, the independent financial adviser, shows that there are 72 dog funds with £12.6 billion under management. In January last year there were just 38 such funds holding £3.3 billion.

Bestinvest said that the number of dog funds had increased because many managers had been wrongfooted by the recent bouts of stock market turbulence. It hoped that its latest report would encourage “dog” owners to consider switching out of these funds.

To qualify for the list of shame, a fund must have failed to beat its benchmark index in each of the past three years, and underperform the index by at least 10 per cent over that time.

The kennel with the worst record was AXA, with £1.25 billion of investors’ money held in poorly performing funds. Most of this was due to the £1.17 billion AXA UK Equity Income fund, managed by Stuart Fowler.

Close behind was Henderson, which has £1.1 billion riding on various dog funds, including the £536 million UK Growth & Income fund, managed by Graham Kitchen and Andrew Jones.

Sharing second place in the doghouse with £1.1 billion of poorly performing funds were HSBC and Schroders. Both were affected by the mediocre showing of one very large dog. For HSBC it was the £1 billion UK Growth & Income fund, while Schroders can thank its £730 million Tokyo fund.

Completing the half dozen financial groups with the most money in dog funds were Canlife (£990 million) and Fidelity (£940 million).

Meanwhile, you could be forgiven for thinking that Canlife enjoys living in the doghouse. Despite regular “naming and shaming”, it still has more than half of its investors’ money in poorly performing funds.

No one from AXA was available for comment. A spokeswoman for HSBC said it had taken steps to address the issue by switching the UK Growth & Income fund from a single manager to a multi-manager approach.

Download Bestinvest's Spot the Dog guide here

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