Latest Content » STRATEGIES, ALLOCATION & PERFORMANCE » Fund Performance Overview

— Tom Beevers, BNY Mellon

In the efficient world of European large-caps it is no surprise that systematic, quant-driven strategies abound. But models notoriously break down at market inflexion-points, and with more than one top fund undergoing recent personnel changes, understanding the balance between man and machine is more vital than ever, writes Martin Steward.

— Thorsten Rühl, Deka

Euro Cautious Balanced funds aim to push the efficient frontier out as far as possible given their very conservative risk profiles. But, as Martin Steward explains, “very conservative” does not mean that this sector leaves little choice or variety for investors.

— Claudia Calich, Invesco

Few foreign investors allocate seriously to emerging market debt and fewer still in local currency securities. Last year’s sliding dollar made it a no-brainer, but even in the long term, managers benefit from the correspondingly diverse sources of alpha available within the asset class. By Martin Steward.

— Rob Hepworth, Allchurches Investment Management

The portfolios of the best performers in large-cap global equities throw up few surprises when it comes to regional or sectoral weightings, but some intriguing individual names indicate that they are finding diverse sources of alpha. Martin Steward explains.

Our US dollar global bonds top 20 shows huge performance dispersion as the best make good bets away from the benchmarks. That means diverse choice for investors, especially as roiling credit markets throw up more alpha opportunities. Martin Steward reports.

— Mark Mobius, Franklin Templeton

Portfolios with core, diversified holdings appear to have outperformed in this sector – top-placed value-investing guru Mark Mobius is the notable exception. But there is some consensus from the bottom-up stockpickers that increasing regional demand is a key theme in these economies. By Martin Steward.

Fundamentally, F&C’s PF Far East Equity Fund takes a bottom-up stock picking approach, but it keeps a close eye on macro-economic developments and political machinations, writes Gerry O’Kane.

The Edinburgh Partners European Opportunities fund is shunning emerging Europe and believes the American wobble could produce some under-valued stocks in Europe, writes Gerry O’Kane.

Teamwork between the high yield and emerging markets divisions of CIF led to the creation of the CIF Global High Yield Fund, which aims to invest anywhere in the world without constraints, Paula Garrido reports.

T. Rowe Price’s Global Emerging Markets Equity fund relies on teamwork and a locally-based approach to get the most out of ‘frontier’ investments. Paula Garrido reports.

A traditional analysis of undervalued stocks is the approach taken by the Axa Rosenberg Eurobloc Equity Alpha Fund, which has been ranked top in the euroland category over three years. Paula Garrido reports.

In order to gain an edge over the competition in Eastern European equities, WestLB Mellon’s European Convergence Fund created its own index. Paula Garrido reports.

A non-aggressive risk-based approach has proven successful for Ashmore Emerging Markets Liquid Investment Portfolio fund which combines dollar and local currency investments. Paula Garrido reports.

Outsourcing proved to be the right move for Julius Bär’s Central Europe Stock fund as it topped the tables over three years. A shake-up in asset allocation has also seen performance soar. Paula Garrido reports.

A diversified portfolio managed with a prudent risk-averse approach has proven successful within the Axa Rosenberg Equity Alpha fund range, but none more so than its Europe ex-UK product as Paula Garrido reports.

In the over-crowded and increasingly competitive Asian market, the PF Asian Equities (ex Japan) fund believes the key to success is through qualitative and quantitative research. Paula Garrido reports.

With the European high yield market benefiting from new opportunities, the BlueBay High Yield Bond Fund has soared. Paula Garrido quizzes the fund’s portfolio manager on its secrets to success.

An experienced and dynamic team is the key to success at the TT European Equity fund, where individuals are given a relatively free reign and bureaucracy is kept to a minimum. Paula Garrido reports.

A combination of choice of currency, country and credit allocation has proved to be a successful mix for T. Rowe Price’s Global Aggregate Bond fund. However, taking a negative stance on the US and significant positions in the euroland, Canada and Mexico has added to 2005’s performance levels. Paula Garrido reports.

The PF-Asian Equities (ex Japan) fund has managed impressive returns by investing in undervalued firms in South Korea. It now has its sights on the currently underperforming Taiwanese technology sector. Paula Garrido reports.

The Genesis Emerging Markets Investment Company fund follows a bottom-up stock picking style that looks for development through long-term holdings, writes Paula Garrido.

WestAM has gained the edge in countries converging into the EU by using their own customised benchmark, which doesn’t have as much exposure to Russia as the MSCI emerging Europe index, writes Paula Garrido.

With its aim of providing long-term capital appreciation through undervalued US equities, Legg Mason’s Value Trust has outperformed the S&P 500 Index for 14 years. Roger Aitken delves deeper.

Axa Rosenberg’s Pacific fund goes after companies in the region’s more established economies, particularly Australia, using a bottom-up stock-picking approach. Paula Garrido explains.

Luxembourg-based Sicav attributes its success in the global equities sector to the steadfast application of the theories of Benjamin Graham, the founder of value investing. Paula Garrido explains.

The strategy behind the Orbis Leveraged fund is to borrow money to invest in the Orbis Optimal fund which in turn invests in a series of the firm’s own equity funds. Paula Garrido explains.

AIG Emerging Europe Equity Fund’s mathematical approach is producing outperformance against global peers. Roxane McMeeken explains.

 “I’m a bit of a nerd when it comes to looking at companies,” confesses David Molnar, portfolio manager of AIG’s Emerging Europe Equity Fund. He appears to know how to pick them. His $98m (€75m) fund has beaten the entire spectrum of global emerging market funds over both one and three years, according to Standard & Poor’s.

Axa Rosenbergs’s UK Equity Alpha Fund has turned around its performance.Roxane McMeeken explains.

Morant Wright’s Japan fund is running rings around its larger and more established competitors, but the company simply puts this down to good timing.Roxane McMeeken explains.

FT Mandate’s fund of the month combines fundamental screening models, technical analysis and behavioural finance – something unique in Germany. Henry Smith explains.

DWS’s Asian strategy is simple – it doesn’t care where the companies it invests in are based, it just buys firms it thinks have a competitive advantage. Henry Smith explains.

— Michael Kushma, fund manager, Morgan Stanley’s European Strategic

Small allocations to non-investment grade vehicles are boosting returns for the European Strategic bond Sicav, writes Roxane McMeeken.

— Hendry: Odey Pan European fund manager

Odey Asset Management profits by staying away from the index in tough times, writes Yuri Bender.

Started in 1991 by Barings refugee Crispin Odey, Odey Asset Management has always had a disdain for benchmarks. As a primarily absolute-return oriented hedge fund house, it has been able to bring some of the risk disciplines and alternative ways of managing money to the world of European equities. Tracking error as a measure of risk, for instance, is seen as “ludicrous” by Odey’s strategists.