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April 27, 2020

UK Lipper Leaders: Looking at Conservative Mixed Asset Funds–March 2020

by Jake Moeller.

The rally year of 2019 has been firmly put to bed with the first quarter of 2020 being dominated by the unfolding Covid-19 drama. This human crisis has dominated the headlines but the collapse of the oil price during this time has also contributed to much of the market volatility we have witnessed so far. In a market such as this, many investors will be seeking to reduce risk exposure via a mixed asset portfolio.

A popular classification for risk-averse investors

The IA Mixed Asset 0%-35% Shares sector is a suitable classification for those startled by recent events and is popular with cautious investors typically with a shorter time-horizon. The higher proportion of lower-risk assets is evident in the Q1 2020 performance: -7.8% for this sector compared to the Lipper Global Equity classification -16.9% (in GBP)

Exhibit One. Top performing IA Mixed Asset 0%-35% Shares funds ranked over 3-years (with 5-year history – to March 2020)

Source: Lipper for Investment Management, Refinitiv. Past performance is not a reliable indicator of future performance

Source: Lipper for Investment Management, Refinitiv. Past performance is not a reliable indicator of future performance.

This sector typically affords a higher degree of capital protection and is potentially suitable for investors near pre-retirement phase although as we see, capital can still be lost. This though, tends to happen mostly in short-term periods of drawdown such as that we are currently experiencing. In the medium to longer-term, this would be an unusual outcome.

A wide range of performance outcomes still possible

Lipper Leaders metrics are useful, even in a less volatile sector. This is because individual portfolio composition can still differ markedly within a 35% cap on equities. Consider the best performing 3-year return this month is 10.9%. The worst comes in at -19.5% This is a considerable difference.

It is notable that all our funds this month have scored a maximum Lipper Leader score for Preservation. This includes the difficult Q1 2020 period and is a reminder that long-term perspectives are key.

Which funds work hardest?

Three of our funds have scored top marks across all four metrics which is a considerable achievement. In this classification, keep an eye out for those funds which get both a high score on Preservation and Total Return. They’re the hardest workers!


Lipper delivers data on more than 265,000 collective investments in 61 countries. Find out more.

This material is provided for as market commentary and for educational purposes only and does not constitute investment research or advice. Refinitiv cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. Please consult with a qualified professional for financial advice. Past performance is not a reliable  indicator of future performance.

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