Funds delivering consistent top-quartile returns fell to 28 out of the 1,440 eligible strategies within the IA universe, or 1.9%, according to the latest Columbia Threadneedle Investments Fund Watch survey for Q2.
The quarterly report measures funds that have delivered top quartile returns in three consecutive rolling 12 month periods.
The number of funds consistently achieving top returns fell from 2.7% in the first quarter of the year.
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The IA Japan sector topped the table for the fourth quarter in a row, with 9% of strategies in the sector delivering consistently strong performance.
The next best was the IA UK Smaller Companies sector, with 4.8% of funds achieving the target.
At the other end of the spectrum, none of the IA North America, Sterling Corporate Bond, and UK All Companies sectors had any funds deliver top quartile returns consistently.
Meanwhile, 258 funds delivered above median returns consistently.
In terms of performance within the quarter, IA India/Indian Subcontinent rose 10.5%, the most of any single sector.
India was followed by IA Technology, with UK Smaller Companies third.
IA Latin America was the worst performer, while 16 of the 56 IA sectors suffered negative returns.
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“While disappointing to see the CT MM Consistency Ratio fall below the long-term average, it is encouraging to see certain sectors showing resilience and strong fund returns,” Adam Norris, investment manager in the CT multi-manager team, said.
“The growth in Indian equities is becoming a lasting trend, benefiting from geopolitical dynamics and a robust demographic profile. While Japan continues to score highly and Asia Pacific ex-Japan equities show signs of improvement, the rise in bond yields and lack of consistent fixed income funds performing well speak loudly to the gyrations of the market’s reading of the monetary policy backdrop and central banks’ actions.”
He added: “While the majority of active managers are struggling against global indices, especially the IA North America sector as mega cap technology stocks dominate overall returns, this reasoning does not hold up when comparing fund returns within their respective sectors outside of the US.
“Looking ahead and despite challenges in fixed income, we remain optimistic about equity markets, especially in underappreciated areas such as UK equities, small caps and alternative investment trusts.”
