The total value of dog funds turning out consistent underperformance has swollen from £12.1 to £13.3 billion over the past six months, boosted by rising markets, according to Bestinvest's latest Spot the Dog report.
Spot the Dog identifies all the UK funds that have underperformed in each of the last three years and by 10% or more over the three years. Although fund values have risen, the number of funds in the dog house has actually dropped slightly from 64 to 59, it reveals.
The highest proportion of dog funds is found in the IMA North America sector, where 12 funds - more than a fifth of the sector - have failed to beat a suitable benchmark index over each of the past three years. Only JPMorgan US is highlighted as 'best of breed'.
As Jason Hollands, managing director of communication at Bestinvest, points out, this 'reinforces the view that the US market is one of the hardest to beat'.
Most of the large fund groups have at least one mutt in the pack, but Neptune and Legal & General stand out in this review for housing no less than five each.
Neptune's dogs include Neptune Emerging Markets, Neptune China and Neptune European Opportunities, while L&G Pacific Growth and L&G North American are also among those in the dog house.
Some fund groups have billions of pounds of investors' money tied up in these serial underperformers. Schroders tops the bill with a massive £4.2 billion, but Neptune and Fidelity both have well over £1 billion.
'Sadly, the funds listed in Spot the Dog represent the tip of the iceberg of poor performance because the criteria we have set is designed to focus on the very "worst of the worst",' says Hollands.
'In our view financial product providers too easily get away with dismal or uninspiring performance, benefiting from a combination of investor inertia and advisers failing to provide a satisfactory level of monitoring on investments they have previously recommended to their clients.'
However, it's also good to note that a number of management groups have completely sidestepped the dog house. Invesco Perpetual, M&G, Threadneedle and First State are among those with no dog funds to their name - this time.
But James Cardew, global head of marketing at Schroders, point outs that less than 1 per cent of the Schroder QEP Global Active Value fund's assets under management (£20 million of £3.2 billion) is held by retail clients.
'We are very disappointed by the analysis undertaken by Bestinvest. It has failed to recognise that the fund's client base is overwhelmingly institutional. We therefore believe the report is misleading,' he adds.
The full report can be downloaded at www.bestinvest.co.uk/dogs.