Performance gap wider in cautious managed than global equities

The gap between the best- and worst-performing funds is wider in the cautious managed sector than in global equities, according to Thames River.

Multi-manager Gary Potter analysed Lipper data for 165 cautious managed funds and 229 global funds from October 1, 2007 to November 11.

He found the difference in performance between the best and worst funds in the cautious sector was 77.2%, compared to 76% in the global sector.

The best fund in the cautious managed sector was up by 55.4% and the worst was down by 21.8%, while in the global sector the best fund was up by 41% and the worst fell by 35%.

The average cautious fund had 20.4% in UK fixed income, 22.4% in overseas fixed income and 9.2% in alternatives or other strategies to the end of September.

The highest allocation to UK fixed income was 66.4% and the lowest was zero. In overseas fixed income it was 74% and 0% respectively. The highest allocation to alternatives was 20.9% and the lowest was 0.

Potter says: “You can see a massive variation in what is considered a cautious managed fund and there needs be further clarification of this category.”