Research sees large drop in global equity outperformers

Arrow_downThe market downturn in the first quarter (Q1) this year meant that only 40% of global equity products either outperformed or matched their benchmarks – a fall from the final quarter of last year when none of the products lost money, research indicates.

It came during a period when clients were still hunting the product, given the global equity universe saw positive inflows of $7.23 billion (€6.23 billion) – almost as much for emerging market equity and bonds combined - according to funds analysed by Camradata, the data and analysis firms that owns Funds Europe.

RAM Active achieved the largest percentage growth in assets under management (AUM) within global equities, seeing its assets increase by 395.51%, followed by Cornerstone, Brandes, T. Rowe Price and Perkins Investment Management.

The figures are drawn from Camradata’s database, Camradata Live, and collected in the firm’s investment research reports for Q1 2018 that chart the performance of investments and asset managers across six asset classes, including global equity, multi-sector fixed income, and emerging markets.

Emerging market equities saw positive inflows totalling over $4.8 billion and that just over 82% of managers achieved positive returns. The results ranged from a loss of 3.24%, to the best performing product which achieved 8.08%.

NS Partners achieved the largest percentage growth in AuM seeing its assets increase by 158.44%, followed by DePrince, Race & Zollo, Axa, Mirae and Lombard Odier.

Emerging market debt products had lower new inflows compared to their equity market peers - just over $3 billion - though only 44% of products either broke even or achieved a positive return. This compares to 97% in the final quarter of 2017.

BlackRock had the largest asset inflows in this product range, totalling $2.846 billion. It was followed by Ashmore Group, Global Evolution, VanEck Associates and Franklin Templeton Investments.

Sean Thompson, managing director of Camradata, described Q1 as a “regime change” with positive returns hard to come by and volatility rising after a more than a year of very strong gains for assets and abnormally low levels of volatility.

“All around the world equity markets have posted negative returns in the first few months of this year. Volatility in equity markets and losses in government bond markets have also triggered a significant fall in the price of many assets around the world, including property, commodities and even investments like gold which should have benefited from increasing political uncertainty in the first three months of this year, have actually lost money,” said Thompson.

The key factors behind the change, he said, were concerns over global trade, rising market interest rates and a return of inflation.

Although global trade has been growing “impressively”, Thompson added, with the “opening salvo of a mutually impairing trade war between the US and China having been fired, obstacles to free trade have been raised”.

©2018 funds europe