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Manager Intelligence and Market Trends
bfinance’s quarterly report in May 2021: read the team’s latest insights on institutional investor activity, risk appetite, market developments and asset manager performance across all major asset classes.
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IN THIS PAPER
With the accelerating roll-out of Covid-19 vaccines in the new year boosting economic optimism in developed markets, multi-asset managers continued to increase their riskasset positioning. By the end of Q1 2021, average equity exposure touched 42% – a level not seen since September 2018.
As investors respond to rapidly changing macroeconomic conditions, they continue to refresh their search activity: Overall, the number of new manager searches for bfinance rose by more than 43% year over year through 31 March 2021, while the volume of capital rose by 51%.
As growth indicators rebounded in Q1, concerns about inflation and interest-rate risk also increased, sparking a number of new manager searches across the fixed-income spectrum – and for viable fixed-income alternatives. This trend was particularly evident in Private Markets, where investors focused heavily on Infrastructure, Real Assets and Private Debt (including Equipment Leasing and Trade Finance).
Across global developed markets, the Value style resurgence that emerged at the end of 2020 continued in Q1; according to bfinance’s manager style composites, Deep Value was the strongest-performing active management style during the quarter, with average excess returns of more than 7% versus the MSCI World Index. In comparison, High Growth fared the worst of any Equity cohort during the quarter, losing approximately 6% on average.
Bond investors fought renewed market volatility in January as economic growth prospects improved, sparking a dip in bond prices as yields rose. US and European highyield managers emerged relatively unscathed, however, delivering positive outperformance as cyclical industries that had been hard-hit by the pandemic, including Transportation, Gaming/ Leisure and Restaurants began to recover in Europe and the US.
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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