Less than 1% of funds achieve consistent top quartile returns

Only nine out of 1,140 funds within the Investment Association sectors achieved top quartile returns over three years as geopolitical tensions take the lead, according to a F&C Multi-Manager survey.

Of 12 IA sectors, only 0.8 per cent of the funds could reach top quartile returns, falling way below the historic average of between 2 per cent and 5 per cent, the survey has found.

In addition, there wasn’t any funds in eight sectors out of 12 failed to record these returns.

Of the remaining sectors, the IA Emerging Markets sector was the most consistent one for returns. There 3.3 per cent of funds in the sector managed to achieve those positive returns.

This was followed by the IA £ Strategic (2.9 per cent), IA £ Corporate Bond (2.6 per cent) and IA UK All Companies sectors (1.2 per cent).

On a more positive note, 124 out of 1,138 funds delivered above median returns over three years as at the end of the first quarter of this year.

A quarter of these funds were in the IA £ Corporate Bond sector, followed by the IA Global Equity and IA Sterling Strategic Bond sectors with 18.4 per cent and 15.9 per cent of funds respectively.

F&C Multi-Manager Solutions investment manager Kelly Prior says: “In the first quarter of 2017, our survey revealed an unusually low number of funds achieving consistent top quartile returns. This is not surprising given how much markets were impacted by geopolitical factors and central banks policies.

“Politics exerted significant influence on the direction of currencies of the affected economies. Despite the Federal Reserve raising interest rates, the dollar fell back as confidence in the ability of President Trump to push through market friendly policies fell. However, the Yen was the beneficiary of this, making solid ground over sterling as a perceived safe haven currency.”