A view of the market movements between January 1, 2024, and December 31, 2024, shows that it is fair to say that this period was a period in which active fund managers could have shown their asset selection and timing skills since the equity markets were driven by a number of different factors. Each of these factors could have caused a major market downturn on their own. There were a lot of geopolitical tensions around the globe beside the war in Ukraine, which showed that democratic states are more vulnerable than one may think. With regard to this, the political

When “the last humans are roaming the earth, picking through dystopian urban hellscapes in search of food, they will still manage to argue about the relative merits and demerits of passive investing,” mooted FT journalist Katie Martin, in the paper’s Unhedged blog. It is indeed a perennial favourite bunfight of the fund world. I’ve stumbled across two irate iterations on LinkedIn this morning, and I wasn’t even looking. The argument has generally been fought on the terrain of equities. And, indeed, the shift from active to passive—particularly in the US—has been huge. But there is also a significant and seemingly accelerating

  Equity mutual funds and ETFs celebrated their fifth quarterly gain in six—with the average equity fund (+6.92%) posting its second straight quarterly plus-side return. LSEG Lipper’s U.S. Diversified Equity Funds (+9.07%) outpaced the other seven equity and mixed-assets macro-classifications for the first quarter since Q2 2023. Q1 2024 had actively managed equity funds (+7.09%) outperform their passive (+5.95%) counterparts by 114 basis points (bps), marking the fourth largest quarterly outperformance by active management since the start of 2013. In this segment, I provide a market recap plus highlight the quarterly and monthly performance results for conventional equity mutual funds

Despite a lacklustre couple of years, there seems to be a buzz around listed infrastructure funds. Infrastructure has become more accessible over time. Not long before the global financial crisis, I was working in wealth management research; then, we were looking at how our clients could invest in the asset class. Given that it was largely unlisted, accessed through large, illiquid institutional funds, the answer was “with great difficulty”. If memory serves, we heaved a collective sigh and moved on. The rise of listed infra funds have changed this and been rewarded by a significant inflow of cash. Between 2004

Despite inflationary concerns, rising interest rates, and wars in Ukraine and the Middle East, increased expectations that the Federal Reserve Board’s rate hikes are nearing an end pushed equity mutual funds and ETFs to their fourth quarterly gain in five—with the average equity fund (+10.26%) posting its largest quarterly gain since Q4 2020 in Q4 2023. For the first quarter in 17, the World Sector Equity Funds macro-classification (+12.84%) outpaced Lipper’s other six broad-based equity groupings. U.S. Diversified Equity (USDE) Funds (+11.83%) took the runner-up position for the quarter, followed by Sector Equity Funds (+11.44%), World Equity Funds (+9.65%), Mixed-Assets

  Fixed income funds realized a return of positive 0.23% on average during the second quarter of 2023, marking the third straight positive quarterly performance. The last time fixed income funds registered three straight quarters of positive performance was from Q2 2020 to Q4 2020. Of the 51 Lipper fixed income classifications, only 23 ended the second quarter with gains—down from 50 last quarter. Flexible Income Funds, Specialty Fixed Income Funds, Emerging Markets Hard Currency Debt Funds, and Ultra-Short Obligation Funds were the only Lipper classifications to outperform their first quarter returns. Summary: Taxable bond funds (+0.28%) outperformed tax-exempt bond

The Lipper Options Arbitrage/Strategies Funds classification are funds that employ various strategies to capture the spread between similar options through inefficiencies in the market or funds and use portfolio strategies where the manager focuses on options to generate the bulk of the portfolio’s return. The Lipper Leaders Rating System is a toolkit that helps guide investors and their advisors in selecting funds that suit individual investment styles and goals. According to LSEG Lipper, “Each fund is ranked against its peers based on the metric used (such as its flagship risk-adjusted return measure, Consistent Return, Total Return, or Expense), and the

Last year was a particularly bloody one for fixed income. It followed a miserable period for bond investors, with many who were constrained to invest in the asset class getting negative real yields (after inflation), thus guaranteeing losses. Some investment strategists had gone so far as to throw in the fixed income towel, looking instead for example to real estate for yield. Then things got much worse for fixed income investors, as rising rates destroyed valuations. “Safe haven” sectors were heavy losers over 2022, such as the IA Sterling Corporate Bond Sector (-16.1%) and UK Gilts (-23.8%). One of the

Using the Lipper Leaders scoring system to analyse the best-performing funds in the IA North America sector.   The coming year is fraught with risk. The US seems likely to head into recession, with opinion divided over not “if” but “when.” Consensus is settling somewhere between the second half of 2023 and early 2024. While there’s no direct correlation between GDP and equity values, they do tend to perform worse in recessions. And, while the S&P 500 has fallen from it December 2021 peak, in percentage terms there is likely still further to go when one compares recessionary peak-to-trough. That

Beating inflation is a lot more challenging when it’s running at more than 10% than when it’s about 2%. The savings accounts with the highest rates are about 5%, so that represents a loss in real terms. Only two Investment Association sectors have delivered double-digit returns over last year: Latin America (17.5%) and Commodities & Natural Resources (23.1%).   High energy The top-performing funds in the former all have significant tilts to Brazil (at about two-thirds of their portfolios), and Latin American performance has been assisted by the rise in the energy sector over the year—something closely linked to the

Fixed income funds realized a return of negative 2.98% on average during the third quarter of 2022. This was the third consecutive negative quarterly performance for fixed income funds and the fourth over the last five quarters. The last time fixed income funds reported three straight negative performing quarters was Q2 through Q4 of 2015. Of the macro-groups, Alternative Bond Funds (-1.44%), General Domestic Taxable Fixed Income Funds (-1.88%), and National Municipal Bed Funds (-2.03 %) suffered the least over the last three months. Government/Treasury Funds (-4.47%), World Taxable Fixed Income Funds (-4.18%), and General Municipal Debt Funds (-4.04%) closed

Fixed income funds realized a return of negative 5.21% on average during the second quarter of 2022, marking the worst quarterly performance in more than 40 years (Q3 1981, -7.06%). This was the second consecutive negative quarterly performance for fixed income funds and the third over the last four quarters. All 51 Lipper fixed income classifications ended the quarter with sub-zero quarterly performance for the second straight quarter. Four Lipper classifications finished the quarter realizing less than 1.0%, which is up from three in Q1 2022. Summary: Taxable bond funds (-5.83%) underperformed tax-exempt bond funds (-3.53%) in quarterly performance for