The number of funds generating top quartile returns over three years has fallen below the historic average, according to a report by BMO Global Asset Management (BMO GAM).
In the third quarter this year, yields in core developed market bonds fell to all-time lows, while gold hit an all-time high, the firm said.
The proportion of funds to achieve top quarterly returns over a three-year period fell to 1.7%, down from 2.3% in the previous quarter.
The Investment Association (IA) Japan sector had the highest number of funds with top quartile performance over three years, with 4.7% out of the 1,088 funds surveyed performing well.
IA Asia ex Japan, and IA Global Bonds sectors failed to have any consistently top quartile funds over the period, the study said.
Europe ex UK only had one out of the 93 IA sector funds with top quartile returns.
Kelly Prior, investment manager in BMO GAM’s multi-manager team, said: “Consistency of fund performance remains at a low despite the ever-expanding number of passive vehicles within the IA per groups.”
“In recent quarters quality growth and passive funds have dominated the consistency tables. In the third quarter of 2019 this trend abated somewhat with the tide reversing at the margin as investors changed their preference towards value.”
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