ABERDEEN Standard Investments has been named by financial advisory business Bestinvest as the UK fund house with the highest number of poorly performing funds, continuing a tradition set by legacy firm Aberdeen Asset Management.

In the latest edition of its Spot the Dog report, Bestinvest named four Aberdeen Standard funds - Aberdeen UK Equity Income, Aberdeen UK Equity, Aberdeen European Smaller Companies Equity and Aberdeen Asia Pacific Equity – as being among 26 in the UK that deliver consistently poor performance for investors.

Between them the four funds have £1.8 billion of assets under management. All four come from the Aberdeen side of the merger that created Aberdeen Standard Investments, with the fund house coming together with Standard Life in an £11bn deal last August.

Aberdeen Standard had by far the greatest investor exposure of any of the other fund houses making it onto the list. While Jupiter Asset Management and Legg Mason each had three funds listed, the total amount of investor money they managed across these was £403 million and £292m respectively.

Fidelity Investments, meanwhile, had only two funds included in the report but the second-highest amount of assets under management at £955m.

Despite topping the list again Aberdeen Standard’s performance is improving, with the number of its funds that feature more than halving over the past two years.

As the report said: “The trend has improved from a low point two years ago, when 11 Aberdeen funds were featured, and as the integration of the Aberdeen and Standard Life businesses progresses we expect a rationalisation of the combined fund range, which will provide an opportunity for the group to put its dog days behind it.”

A spokesman for Aberdeen Standard said that as all its fund managers have access to more in-depth research following last year’s merger they are now better placed to deliver returns for investors.

“It’s encouraging that the number of our funds in the doghouse continues to fall and that only four out of our combined 150-plus UK mutual funds are on the list,” he said.

“Our Asia Pacific fund has produced good returns but has lagged the benchmark as our fund managers have been cautious about investing in some of the high-flying tech stocks. Similarly, our UK and European funds have also produced reasonable returns for investors.

“The enlarged and strengthened UK and European equity teams? and our focus on fundamental, in-house research, makes us confident that we will deliver for investors over the long term.”

Fellow Scottish fund house Baillie Gifford had one fund included on the list – its British Smaller Companies portfolio.

It also had one included on Bestinvest’s list of ‘pedigree’ buys – the Baillie Gifford Japanese fund.

When compiling its list Bestinvest looks at all UK domiciled funds that invest in equities to identify those that have underperformed their benchmark over three consecutive 12-month periods.

To make it onto the list the funds must have underperformed by five per cent or more over the entire three-year period of analysis.

Part of the reason Bestinvest conducts the research is to highlight how difficult it is for active managers to generate above-market returns for investors, especially when the fees they charge are factored in.

As the report said: “Markets trade globally around the clock, information is available within seconds and large companies in particular are analysed in detail by scores of analysts at banks, brokers and fund managers all of whom are trying to find an edge.

“It is unsurprising then that fund managers need to be really good just to be average.”

However, Bestinvest noted that investors should not immediately sell out of funds just because they appear on the Spot the Dog list, with even the best performers liable to experience periods of poor performance from time to time.

“It is important to stress that Spot the Dog is not a list of funds that should be sold automatically, as it is based purely on factual analysis of past performance, which is not necessarily a guide to how a fund will perform in the future,” the report says.

“Indeed there may be good reasons to believe the future prospects are better.”