Diversified growth funds are designed to deliver growth-driven return across a broad spectrum of market conditions, but in Q4 2018 it was hard to locate sources of growth and hard to find sufficient refuge. Performance suffered as a result.
For fixed income investment, global liquidity tightening (as the Federal Reserve, European Central Bank and Bank of England unwind their long-running asset purchase programmes), in combination with a weakening outlook for the global economy, presented difficult questions around how to manage strategy.
That’s according to two new reports from CAMRADATA which chart the performance of investments and asset managers across Diversified Growth Funds (DGF) and Multi Sector Fixed Income (MSFI).
Sean Thompson (pictured), Managing Director, CAMRADATA says: “Concerns over trade and economic growth presented a challenging final quarter for investors. This left many seeking to rebalance portfolios towards lower risk assets. However, global liquidity tightening is the order of the day and this presents headaches for investors considering an increase in their bond allocations.”
“These turbulent conditions provide both a test and an opportunity for diversified growth funds. Furthermore, rising interest rates present a challenge to fixed income managers that they have not had to contend with in a number of years. Our reports highlight poor performances for both at the end of 2018.”
