pa analysis investors and managers in sync

If you close your ears to the constant bombardment of negative news from the eurozone, tough to do I know, there are actually some reasons for optimism starting to filter through investment circles.

pa analysis investors and managers in sync


Today, two separate pieces of research showed an improvement in fund performances during the third quarter, despite some of the worst market conditions since 2008.

Could it be that managers are becoming, like us, desensitised to the euro-faff? Or have they learned how to navigate the uncertain and inconsistent markets we have witnessed since the start of the year?

Thames River Multi-Capital’s (TRMC) latest Fundwatch survey would suggest that actually managers are merely improving on previous results.

Its ‘TRMC Consistency Ratio’ measures the proportion of funds that have performed consistently above average in each of the last three 12-month periods, in addition to those that are consistently top quartile.

In the 12 sectors researched TRMC identified 1,230 funds with three-year track records. Of these 177, or 14%, of funds delivered above median returns in each of the three 12-month periods.

This figure was up from 13% of funds last quarter, with each of the 12 sectors having a few funds that met this performance criterion.

Clearly, if funds as a whole are performing poorly, above average performance is not too convincing, but nonetheless an improvement is an improvement and not something to be sniffed at.

Managers worth their salt

Meanwhile, CAMRADATA released its Q3 IQ Report which showed asset managers beating benchmarks across the investment universe.
Managers in the European fixed income, UK equity, global equity and multi-asset sectors had all demonstrated outperformance, with median managers topping benchmarks over the three-year period.

In the UK equity sector, managers had "dramatically improved", according to CAMRADATA. Against a median measure of 3.3% above the benchmark, some managers posted returns of 26%.

Steve Butler, managing director of CAMRADATA, said: "The doom-laden tone of general news coverage of the turmoil in the markets belies the fact that asset managers are continuing to uncover, pinpoint and deliver returns for their clients."

Rob Burdett, co-head of Thames River Multi-Capital, also said some managers had not been given their dues in the past few years.

"As the three years for the study this quarter now encompasses the majority of the ‘credit crunch’ era, managers appear to have dealt better with this volatile period than one would have expected in terms of regular above average returns at least.

"Perhaps the bitter experience of trying to successfully navigate their way through choppy waters of persistent bad news and irregular markets has seen many fund managers find a way of improving performance amidst the ‘new normal’."

Separately the IMA published research today that said the appetite to invest remains, despite a fall in investor confidence over the past six months.

Its latest Investor Perspectives Survey showed 35% of UK investors intend to invest in a new investment product in the next 12 months, while 46% plan to add to existing investments and only 20% are considering withdrawing money.

So maybe investors and managers are more in sync than they are sometimes given credit for, as they seem to be doing a similarly good job of tuning out the eurozone crisis and the subsequent heave and ho of markets.


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