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Manager Intelligence and Market Trends
bfinance’s quarterly report in November 2020: 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
Although the bfinance Risk Aversion index remained in ‘fear’ mode through Q3, investors and market participants are evidently willing to demonstrate some ‘greed’ as risk asset exposures continued to rise and growth styles won out over their quality or value counterparts despite a tough September for equities. Does this indicate comfort with the economic outlook amid the pandemic’s progression, or a pragmatic ride on the “great asset price inflation” bandwagon?
Manager selection activity among bfinance clients continues to move in favour of private markets, with a 34% increase in the number of manager searches for illiquid strategies year- on-year.
Although liquid alternatives are receiving reduced investor attention from a mandate perspective, Q3 brought strong results across a range of hedge fund and multi asset manager composites, with September at last enabling diversifying strategies to show their diversifying capabilities.
Fixed income managers have been delivering strong outperformance in 2020; this continued in Q3, with 81% of US investment grade credit managers beating the market. Yet the story was more mixed in high yield bonds, where managers who had moved towards a more defensive positioning missed out on a rally in lower-quality issues.
Performance dispersion is wider-than-usual across many asset classes as the pandemic’s ‘winners and losers’ begin to emerge.
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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