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Manager Intelligence and Market Trends
bfinance’s quarterly report in May 2020: read the team’s latest insights on institutional investor activity, risk appetite, market developments and asset manager performance across all major asset classes.
IN THIS PAPER
Rather than a slowdown in manager search activity, Q1 brought a rise in new mandates launched by bfinance clients. This was particularly true in private markets, which represented 52% of all searches initiated in the quarter.
Most equity searches in 2019 had a quality or defensive undertone and these styles were strongly rewarded in Q1: a composite of quality-focused active equity managers outperformed the MSCI World by almost 8% and also beat quality-tilted indices. ESG strategies, strongly associated with the quality factor, also outperformed.
Investors await valuation “capitulation” in private markets, with the buyer-seller expectation mismatch likely to take a further one or two quarters to resolve.
It was a rough quarter for investment grade credit managers who struggled to beat their benchmarks due to high credit risk exposure: only 32% of European active managers beat the benchmark in March, as did 40% of US active managers. High yield bond managers, on the other hand, benefited from being conservatively positioned relative to their benchmarks.
Multi Asset strategies continue to dominate new mandates in the liquid alternatives sector, in part due to the trend towards “outcome-oriented” or “sector-agnostic” manager searches. Certain sectors within Multi Asset showed impressive resilience in Q1, with the GARS cohort down just 2.1%.
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Each quarter, bfinance publishes information on investor activity, key market trends and manager performance. A quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't.
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This commentary is for institutional investors classified as Professional Clients as per FCA handbook rules COBS 3.5R. It does not constitute investment research, a financial promotion or a recommendation of any instrument, strategy or provider. The accuracy of information obtained from third parties has not been independently verified. Opinions not guarantees: the findings and opinions expressed herein are the intellectual property of bfinance and are subject to change; they are not intended to convey any guarantees as to the future performance of the investment products, asset classes, or capital markets discussed. The value of investments can go down as well as up.
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