CAMRADATA’s Diversified Growth Funds (DGF) investment research report for Q4 2018, which charts the performance of investments and asset managers across the DGF universe, revealed a difficult quarter for managers of these funds.
Diversified Growth Funds are designed to deliver positive returns across a broad spectrum of market conditions; however, it was hard to locate sources of growth and find sufficient refuge in the final quarter of 2018. Performance suffered as a result.
The quarter compounded what had already been a difficult year for managers of these funds, with less than 2% of funds tracked on CAMRADATA Live in the universe achieving a positive or breakeven return over the quarter. This was a marked deterioration compared to the previous two quarters when more than 70% of funds achieved a breakeven or positive return. Against this backdrop, diversified growth funds experienced net outflows of more than £5 billion (€5.8 billion) over the quarter, marking the fifth consecutive quarter in which this universe has seen negative asset flows.
As a result of these withdrawals, and due to downward movement in asset valuations, diversified growth funds tracked by CAMRADATA suffered another significant decline in overall assets under management (AuM). Since Q3 2018, AuM has fallen by more than £14 billion, meaning that assets in the DGF CAMRADATA universe are now £24 billion below their peak achieved at the end of Q4 2017.
Despite a difficult 2018, the diversified growth funds tracked on CAMRADATA Live have performed well over the past three years, with 93% of vehicles achieving breakeven or positive returns. This has been reflected in asset flows with the DGF universe experiencing net positive inflows of over £19 billion over three years up until the end of 2018.
According to the CAMRADATA IQ scores for the three years up until the end of December 31, 2018, the standout product with an objective of cash plus 3% to 5% was from Legal & General Investment Management, while the standout product with an objective of cash plus 5% to 7% was from Invesco Ltd.
A turbulent 2018 for diversified growth funds concluded with its most challenging quarter of the year; however, with a positive start to 2019 for stock markets around the world, managers of diversified growth funds will be hoping that the recent trend will be reversed and that they will be rewarded with positive inflows.
To read more of our DGF investment research report or to read our investment reports into across several other asset classes, including Emerging Markets Equity and Multi Sector Fixed Income, please log in to CAMRADATA Live at www.camradata.com
The CAMRADATA investment research reports are based on all up-to-date vehicles in the Diversified Growth Fund universe in CAMRADATA Live. All figures are based over 3 years up until the end of 31st December 2018 unless otherwise stated.
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