Investment managers hoping to lure savers from low-interest Isas are under the spotlight after a survey revealed 64 funds worth £12 billion are more than 10% adrift of the market over three years, a raft of blue-chip Scottish-managed funds among them.

The 20-year-old "Spot the Dog" survey by adviser Bestinvest, covering pensions for the first time, also found 89 pension funds worth £11bn with similar under-performance.

To qualify for the doghouse, funds must have underperformed their benchmark in each of the last three years and by more than 10% over the three years to the end of 2012.

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The worst offenders were Scottish Widows Investment Partnership, with four UK funds worth £4bn in the doghouse, BlackRock with three funds (two UK, one US) worth £1.2bn, and Baillie Gifford making a surprise appearance with three emerging markets funds worth £1bn.

Standard Life UK Opportunies was the worst UK fund, down 31%, yet it also achieved a "best in breed" ranking with its successful Global Absolute Return Strategies fund, 16% ahead of benchmark over three years.

Standard's UK Opportunities was also the worst-performing pension fund over three years, down by 30%. Next worst were Abbey Life UK Ethical, Scottish Widows Ethical, Scottish Widows UK Opportunities, and BlackRock UK Dynamic, all behind benchmark by 14%.

Jason Hollands at Bestinvest said: "As we approach the end of the tax year, fund companies will be busy showcasing those of their funds which are currently riding high in the performance tables.

"Yet the reality is that many of the funds these companies have promoted in the past have gone on to disappoint, often due to a combination of poor decision-making and high charges."

Mr Hollands added: "Sadly the funds listed in 'Spot the Dog' represent the tip of the iceberg of poor performance because the criteria we have set are designed to focus on the very 'worst of the worst'. The purpose of the guide is raise awareness because in our view financial product providers too easily get away with dismal or uninspiring performance, benefiting from a combination of investor inertia and advisers failing to provide a satisfactory level of monitoring on investments they have previously recommended to their clients."

David Thomson, investment director at VWM Wealth in Glasgow, said: "It always surprises me how much money is held in these dog funds as our philosophy is to run winners and cut losers. However, perhaps with the caveat that it pays to understand why a fund has underperformed – for example in a weak market sector, such as Europe recently, an adventurous fund would probably have underperformed – but this same fund could be a top performer if its strategy has not changed and Europe starts to recover.

"There can be many other reasons why a fund is underperforming and investors should exit – perhaps a talented fund manager has left or become distracted by running other funds, or even the fund has become so big it is unwieldy and not as nimble as it once was."

Mr Thomson added: "We are pleased the review has been extended to pension funds as this is often 'captive money' where it can be relatively difficult to switch away and we expect to see a number of dogs in the pound."

Mr Hollands said the risk of being stranded in dog funds was now greater, because advisers can only receive the historic "trail" commission, typically 0.5% of the fund a year, on existing investments. Switching to a different fund would trigger the need for a fee-based negotiation with the adviser for advice.

"There is a perverse incentive for advisers not to provide further advice on existing investments unless asked, since this could interrupt the payment of lucrative commissions and require them to charge explicit fees which some of their clients might baulk at."

But he added: "It is important to emphasise you should not automatically switch out of a fund - since action may already be under way to affect a turnaround in fortunes." Bestinvest has a Free Investment Report Service & Tool (First) aimed at identifying performance issues.

Mr Thomson added: "The large groups mentioned in the survey have to be commended as it is not easy to have no dogs."

The guide commends a selection of managers including JPMorgan Asset Management, M&G, AXA Investment Management and BNY Mellon/Newton who have no funds in Spot the Dog despite managing extensive fund ranges.

However, Alan Dick, financial planner at Forty Two Wealth Management in Glasgow, warned: "These backward looking guides are of no use in trying to build a successful investment strategy going forward."

Scottish Widows said it was completing the process of transitioning a number of equities funds, including those named in the survey, to a new equities strategy. Standard Life Investments said its fund performed best when midcaps outperformed larger cap stocks and it was con-fident that a recovery in 2012 would continue well into 2013. Baillie Gifford said its highlighted funds had performed well over five and 10 years.