Balanced funds buoyed by best returns in 34 years
Fund managers running balanced mandates – multi-asset funds that invest across equities and fixed income – posted their best returns since 1975 in the three months to September 30, with an 18.4% rise; this performance comes on the back of strong rallies in the equities and fixed income markets.
Balanced funds – once the investment of choice for many UK pension funds – have fallen out of favour in recent years. However, the performance measurer BNY Mellon tracks 50 funds with around £16.8bn (€18.7bn) under management.
The best-performing fund managers during the quarter were Aberdeen, Taube Hodson Stonex and the multi-manager Russell Investments, all of whom posted returns of over 20% in three months.
However, over the longer term, the best-performing balanced fund is Newton's global exempt product; ranked first over 12 months and three years. Schroders' balanced fund has also done well; it runs a portfolio on behalf of wealth manager St. James's Place, which is placed second over 12 months by BNY Mellon.
Balanced managers have been steadily increasing equities allocations this year; reaching 80.9% by the end of the third quarter; up from 77.6% at the end of June. Weightings fell in cash and bonds.
Meanwhile, the global equity funds tracked by BNY Mellon rose 21.3% on average during the third quarter. However, in the midst of such strongly rising markets a number of fund managers failed to beat their indexes. The FTSE All-World equity index, for example, against which BNY Mellon compares global equity managers, rose by 21.7%.
In UK equities, the average manager also failed to beat the index this quarter – the FTSE All-Share rose 22.4%, while the managers posted 22.1% on average.
During the 12 months to September 30, the best-performing UK equities firms are boutique SVM, whose UK Opportunities fund is up 53.5%, and Standard Life Investments, whose unconstrained fund is up 51%.
Bond managers did better. In sterling fixed income, the average manager returned 8.4% – well ahead of their comparative indexes, which they beat by 5.3% on average. International bond managers tracked by BNY Mellon returned 10.1% in the quarter, outperforming their indexes by 0.6%.
BNY Mellon reports performance within the pooled funds offered by asset management companies for investment by UK pension schemes. Pooled funds are generally-available products run according to standard strategies; as opposed to bespoke investment contracts that are agreed between individual companies and investors.
The performance-measurement company tracks 66 asset managers who run around £390bn in pooled funds in total, both balanced and specialist.
– Write to: mcobley@efinancialnews.com
del.icio.us
Digg
Newsvine
reddit
StumbleUpon