Only 1% of funds achieve consistent top-quartile returns

The number of funds delivering consistent top quartile returns over a three-year period remains below the historic average despite improved performance at the end of last year.

According to the FundWatch survey conducted in the fourth quarter of 2017 by the multi-manager team at BMO Global Asset Management, just 1.24% of funds delivered consistent top quartile performance over three years. This was an increase from 0.8% at the end of the third quarter of 2017 but below the historic average of between 2% and 5%.

The number of funds generating above-median returns in each of the last three years fell from 9.7% to 9% at the end of 2017. All 12 main Investment Association sectors had funds meeting this criterion, with the UK Smaller Companies sector boasting the highest proportion of funds to achieve the feat, 17%.

The Sterling Strategic Bond sector was the most consistent for top quartile returns at 4.6%, followed by the UK Smaller Companies sector (4.4%) and the Japan sector (4.2%).

The survey also revealed that the best performing product was the Baring Korea fund which achieved the best return of all funds tracked by the Investment Association in the quarter. Run by Hyung Jin Lee, the fund has significant positions in large technology stocks, which have performed well recently.

Kelly Prior, investment manager in BMO Global Asset Management’s multi-manager team, said: “Our survey shows fund managers are still finding it challenging to deliver consistent performance over the long-term. While we have seen a slight increase in the number of funds delivering top quartile performance over three years, it’s still falling short of the industry average.”

©2018 funds europe

 

HAVE YOU READ?

THOUGHT LEADERSHIP

The tension between urgency and inaction will continue to influence sustainability discussions in 2024, as reflected in the trends report from S&P Global.
FIND OUT MORE
This white paper outlines key challenges impeding the growth of private markets and explores how technological innovation can provide solutions to unlock access to private market funds for a growing…
DOWNLOAD NOW

CLOUD DATA PLATFORMS

Luxembourg is one of the world’s premiere centres for cross-border distribution of investment funds. Read our special regional coverage, coinciding with the annual ALFI European Asset Management Conference.
READ MORE

PRIVATE MARKETS FUND ADMIN REPORT

Private_Markets_Fund_Admin_Report

LATEST PODCAST