High performance funds can ‘fall out of fashion’

Written by Editorial Team

High performance funds can ‘fall out of fashion’

14 January 2008 / by None

Investors who tend to concentrate on high-performance funds could lose out amid a sudden change in the market, warns research by F&C; Investments.

Figures have shown that even the highest-performing funds will have periods when their methodology “is not in vogue”.

The study has shown that few managers have proved that they perform consistently well across market conditions over the last five years.

Richard Philbin, head of funds of funds at F&C;, commented: “A handful of competent fund managers have demonstrated their ability to perform well across a range of market conditions consistently.”

He outlined the fact that most funds are unable to deliver consistently due to manager turnover and the fickle nature of investment styles.

Mr Philbin’s colleague Dean Cheeseman said that focusing on funds currently topping performance tables is risky because the position can be rapidly reversed with market change.

Poll results released by The Association of Investment Companies (AIC) and Unbiased.co.uk have shown that fund managers are largely optimistic about 2008, while remaining cautious about the ongoing effects of the credit crunch.

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