While the highest returns come from a range of sizes of company, the difficulty in maintaining performance across a broad fund range is underlined.
Just one company in the top 20 on a sector level has more than two funds within one space – Marlborough has five funds in the UK and scrapes into the top 20 in 20th position across all companies on a sector-specific basis. This can be because of the expertise needed to invest in certain markets, especially country-specific.
Looking at the Fixed Income sectors, T.Rowe Price saw the greatest returns, with £1,079 over four funds. The Global Bonds sector has seen the highest performers within all sectors, while Strategic Bond funds have failed to see the same success.
Mixed Investments covers all funds that can invest in more than one asset class, and multi-asset funds are firm investor favourites at the moment. But again, the numbers do not show great returns. While BNY Mellon has been successful in other areas, it shows a small loss – despite topping the space for large companies. Small companies seem to dominate returns for the space, which can be hard to manage for smaller groups because they tend to have fewer analysts and experts than larger companies – something needed for multi-asset funds.
Adviser sentiment
Given it has been a tough year for markets and funds, have advisers had to change their views on how to invest?
Sandy Robertson, managing director of Aberdeen-based Acumen Financial Planning, says the company’s planning outlook does not necessarily change because of short-term fluctuations in financial markets.
When it comes to the type of investment he prefers, he says, “We like all clients’ investments to produce income. An asset that produces no income, such as gold, is a speculation on being able to sell it at a higher price to someone else. We like all client investments, irrespective of asset class, to be capable of being traded on a recognised market on a daily basis so when liquidity is required it is there.”
Elsewhere, Roger Milbourn, senior partner at advisory firm Financial Themes in London, says that unit trust performance over the past year gives strength to the need to actively monitor and manage investments. “Our value proposition is very much centred on preserving capital as well as growing it, and while the charges are higher for an active proposition, with markets as volatile as they are, passive investment strategies are feeling the pinch.
“Given that unit trusts are available across most products, the investment dog should almost always wag the tax tail, and not the other way around. However, tax planning is at the forefront of financial planning and product selection plays a large part in the overall advice to the client,” he adds.
