Stay out of the dog house

From time to time you may have seen reports in the financial pages of the newspapers mentioning ‘dog’ funds. You may have wondered what the term means and be concerned about what you should do if you find you are invested in one of these funds.

What a ‘dog’ tag means

Put simply, a ‘dog’ fund is one that is deemed to be poorly performing. All investment funds fall into sectors – for example, UK smaller companies or global emerging markets. Classifying them under these headings means that it is easier to make meaningful comparisons. They can be compared both against each other and against the average performance for all the funds in that sector. If a fund is consistently showing as being 10% below the sector average, then it can earn the ‘dog’ tag.

Keeping a close eye on the performance of your assets will mean that under-performing funds can be identified quickly and monitored. If necessary, changes will be made to your portfolio.

The value of investments and income from them may go down. You may not get back the original amount invested.