London-based investment adviser Bestinvest has revealed £23.2 billion of investors' money is held in underperforming 'dog' funds.

In its 'Spot the Dog' report, the adviser discovered the amount held in underperforming funds had risen by 74 per cent since November 2010.

The rise came despite the number of dog funds increasing by just four to 94 this year.

Adrian Lowcock, senior investment adviser at Bestinvest, said the increase in investor money held in dog funds was a 'shocking leap'.

He said, 'Once again it’s clear that the industry has little appetite to address abject underperformance and that too few investors are willing to vote with their feet.

'Until they do, it’s doubtful whether fund managers will ever be sufficiently motivated to clear up after their dogs.'

The investment advisory company also revealed £348 million had been paid in annual management charges over the past 12 months.

Lowcock added, 'With stock markets in turmoil, fund managers can no longer rely on rising markets to hide lousy performance.

'Meanwhile, investors simply can’t afford to leave their precious savings languishing in dog funds. Now is the time for them to take action.'

Bestinvest found Fidelity International had topped the dog list, with the largest amount - £3.4 billion - invested in dog funds, primarily the Fielity European fund.

Newton followed with £2.1 billion invested in dog funds, BlackRock held £2 billion, Schroders had £1.7 billion tied up in underperforming funds, and Scottish Widows/Scottish Widows Investment Partnership held £1.5 billion.

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