Only 2% of funds consistently achieve top quartile returns over three years
Kelly Prior (pictured) is an investment manager in the multi-manager team at Columbia Threadneedle Investments
In total, just 27 of 1,286 funds made top level returns, although this figure was an improvement on last year, which saw only four funds (0.35%) achieve the same.
This result puts the number of funds generating top quartile returns over three years within the historical average range recorded by the survey for the first time since Q4 2021.
UK M&A activity falls in H1 as volume of deals slumps
The IA UK Smaller Companies sector had the most consistently performing funds for the second quarter in a row, with one in ten funds achieving top quartile returns over three years, followed by the IA Japan sector, with 7.4% of funds.
Comparatively, no funds in the IA UK All Companies, IA Strategic Bond and IA Global Mixed Bond sectors recorded consistently top quartile returns in the three consecutive 12-month periods, and the IA North American sector only saw one fund — the Artisan US Value Equity — meet the mark.
On a total returns basis for the sector, only 20 of the 57 IA sectors saw positive returns in Q2 2023.
In the final month of the period, all three IA UK sectors struggled, with the IA UK Equity Income sector losing 1.7%, the IA UK Smaller Companies sector down 1.4% and the UK All Companies sector falling by 0.8%.
The survey found UK bonds also faltered in the quarter, with the change in prospects for interest rates and persistently high inflation causing the IA UK Index Linked Gilt sector to fall by 8.8%, followed by the IA UK Gilt sector, which was down 5.6%.
Fixed income in H1: 'Year of the bond' looks more like 'year of the coupon'
Kelly Prior, investment manager in the multi-manager team at Columbia
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