Multi-sector funds have posted significantly stronger returns since the start of the market volatility, according to a Standard and Poor’s fund services sector review.
However, four out of 13 managers have had their ratings downgraded in the review as a result of investment process changes, or personnel departures and reorganisations.
The asset class delivered nearly 1 per cent returns in conservative strategies and negative 6.5 for high growth over the last three years.
Introducing commodities, private equity, infrastructure, hedge fund of funds, and global tactical asset allocation (TAA) was responsible for the performance of the sector.
Managers have also used flexible investment mandates to move out of markets that are constrained by minimum and maximum asset class limits, while a handful of mangers are using hedging strategies to improve their ability to outperform the consumer price index, lessening the impacts of the market.
S&P fund analyst Justine Gorman said S&P had observed a marked improvement in alpha being generated by managers who have used TAA over the last three years.
Fund managers that can go into a broad range of sectors can avoid investing only in funds that are run in-house, she said.
