According to analysis from Enhance, most discretionary managers outperformed their benchmarks during the first quarter.
Enhance director Lee Quemard, said: “Those investment managers that held onto risk assets, following a challenging second half of 2011, should have been rewarded in this first quarter. The reversal of the fortunes for government debt, which was weaker in Q1, coupled with better returns from corporate bonds helped the relative returns. Better still, many investment managers recovered all of the declines that they suffered in 2011."
He added that returns of between 3% and 5% were the average for sterling balanced portfolios, saying: “Given the cautious nature of a good proportion of our clients, preservation of those positive returns is key going into what looks likely to be a very challenging second quarter".
Looking at the asset classes themselves, in sterling terms government bonds (represented by the FTSE Actuaries All Gilts Total Return Index) were down -1.74%; corporate bonds (iBoxx GBP Corporates Total Return Index) were up 4.01%; global equities (MSCI World Total Return Index) were up 8.36%.
