It’s time to ditch your dog funds

If you own shares in any of the underperforming funds on this list of shame, ditch them. Tim Bennett explains what you should buy instead.

Quite how some fund managers keep their well-paid jobs is a mystery. Every six months, BestInvest publishes its list of Dog Funds the worst-performing unit trusts and open-ended investment companies (excluding pension funds, with-profit funds, institutional funds, corporate bond and property funds). Every year for the last few, the same names have popped up in the top ten. Who are they and how can you shake them up?

Making the list shouldn't be easy. To qualify as a dog', a fund has to have missed its benchmark in each of the past three years, and also has to have underperformed by 10% or more cumulatively over that period. That's why it's pretty shocking to find that around £9bn of our money is sitting in funds that make the list. The worst funds have actually lost money even as their benchmark rose. To add insult to injury, last year alone £133m was paid in fees to these consistent underperformers.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.