F&C: Just 2% of funds achieve consistent top quartile returns

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Research by F&C’s multi-manager team has shown that only 25 funds in the 12 main IMA sectors were in the top quartile in each of the last three 12 month periods.

The data, which is to the end of the second quarter, reveals that just 2.05 per cent of the 1,221 funds housed in these sectors have maintained first quartile performance. This represent a decline from the first quarter, when 4.56 per cent of funds showed consistent top quartile returns.

IMA Global Emerging Markets proved to be the most consistent sector with four funds, or 9 per cent of the space, making the grade. However, four of the 12 sectors failed to boast any members with consistent returns.

F&C Investments co-head of multi-manager Rob Burdett says: “After a significant jump in top quartile consistency in the first quarter of this year, Q2 2013 saw a lurch back to the bottom end of the historic range of between 2 and 4 per cent.

“The average overall was bumped up by the small IMA Global Emerging Markets sector, where four of its 46 constituents achieved consistency; however, three of these were First State Emerging mandates and therefore linked. Consistency, it would seem, is as hard as ever to find.”

The study notes that the recent market volatility is likely to have have hampered the number of funds achieving consistent top quartile performance.

But despite the sell-off in June, IMA Japan was the best performing fund in the second quarter. IMA Global Emerging Markets was the worst following the slowdown in China.