Q2 2019 ‘Diversified Growth Funds’ investment report reveals performance recovery, but investors remain cautious

CAMRADATA, a leading provider of data and analysis for institutional investors, has published its latest investment research report for Q2 2019 on Diversified Growth Funds (DGFs) – charting the performance of investments and asset managers.

Data from over 90 investment products on CAMRADATA Live (its online manager research platform) at 30 June 2019 was analysed to produce the DGF report and some key investment trends emerged for Q2.

The DGF investment report highlighted another quarter of positive performance as DGF products continue to recover from a tough end to 2018. This positive performance means that over the last year to 30June 2019 the DGF universe has achieved a median return of 3.20%.

However, despite this positive performance, investors were again reluctant to commit new money flows to the DGF segment. The sector experienced net outflows of £5.84bn over the period, the seventh consecutive quarter in which the universe has seen net redemptions. Against this background of net disinvestment, DGF assets under management are now £23.2bn below the peak seen at the end of 2017.

Sean Thompson, Managing Director, CAMRADATA said, “These are difficult times for managers of DGF funds. Investor appetite seems to have waned and managers of these funds might be asking themselves what more they can do to encourage positive flows into this asset class.

“After the longest bull run in history, the outlook for the global economy looks increasingly uncertain, with some commentators pointing to yield curve inversion in US government bond markets as a harbinger of darker economic times ahead.

“DGFs earned a good reputation for successful navigation through the Global Financial Crisis of 2008-9, so it will be interesting to see if worsening economic conditions encourages investors to switch their attention back to these funds.”

Below are the Q2 2019 highlights for Diversified Growth Funds:

  • Over the last quarter the DGF universe has seen £5.84bn in net outflows, marking the seventh consecutive quarter in which the universe has experienced net outflows.
  • Since Q1 2019 DGF assets under management decreased by £2.80bn, marking the third consecutive quarter that assets under management in the universe have fallen.
  • LGT Capital Partners achieved the largest asset inflows with £406m in Q2 2019. DWS were just behind, achieving net inflows of £390m, followed by HSBC Global Asset Management, Threadneedle Asset Management and Baillie Gifford & Co.

Sean Thompson concludes, “This report has detailed analysis and commentary for diversified growth funds for Q2 2019, which is essential reading for investors looking to keep abreast of what is happening in this asset class.

“CAMRADATA Live monitors the strategies of asset managers, keeping investors up to date on what’s happening across hundreds of asset classes and helping them make more informed investment decisions.”

To access the full report please contact: info@camradata.com