You may have seen articles in the financial press referring to ‘dog’ funds, and wondered what the term means. If so, don’t be concerned, put simply, a ‘dog’ fund is one that is regarded as an under- performing fund.
Meaningful comparisons
All investment funds fall into sectors – for example, UK All Companies, Global Equity Income, Japan, UK Smaller Companies or Global Emerging Markets. By classifying funds under these headings, it makes it much easier to make meaningful comparisons. As well as being compared against each other, they can also be compared against the average performance for all the funds in that sector. If a fund is consistently 10% below the sector average, it can earn the ‘dog’ tag.
By keeping a close eye on the performance of your assets, under- performing funds can be quickly identified and monitored, and if necessary, changes made to your portfolio.
The value of investments and income from them may go down. You may not get back the original amount invested.
If a fund is consistently 10% below the sector average, it can earn the ‘dog’ tag