Amid the general carnage on capital markets globally in the wake of fears Coronavirus and the associated Covid-19 may halve or worse global economic growth in 2020, analysis performed by InvestmentEurope has found few, if any, sectors have been able to provide fund investors with a safehaven option.
Using data from FE fundinfo, the charts below illustrate the near term challenge facing investors also from the impact that the risk off period is having on relative values of currencies.
Benchmarking UK consumer prices in euros over the week 21-28 February, shows that while absolute return sectors in Switzerland, Austria, Germany provided some downside protection, they still lost money over the period.
In terms of the currency effect, InvestmentEurope looked at the UK's Investment Association Global Bonds and Targeted Absolute Return sectors. In sterling terms it suggests providers of AR funds may have a difficult series of discussions ahead of them with investors.
However, when the same sectors are reviewed over the same time period with the currency rebased in euros, it is a very different matter. Here, both sectors have fallen, albeit Targeted Absolute Return still has fallen more.
Notwithstanding the above findings, there are funds that have bucked the trend, and provided real positive returns over the past week or so.
By way of example, in the UK, among funds categorised by the Investment Association, the 10 funds that performed best in sterling terms are outlined below.
|Fund||£ GR %|
|VT Clear Peak Capital UK Long/Short Equity A Acc GBP in GB||6.63|
|Vanguard Japan Government Bond Index Inv USD in GB||5.81|
|ASI Strategic Investment Allocation in GB||5.03|
|Allianz Strategic Bond C GTR in GB||3.13|
|Allianz Fixed Income Macro E Acc GBP in GB||3.10|
|Threadneedle Global Bond ZNI GBP GTR in GB||2.87|
|Fidelity Institutional UK Index Linked Bond Inc GTR in GB||2.77|
|Threadneedle Aquila Life O S Platinum TPQ in GB||2.76|
|iShares Index Linked Gilt Index (UK) D Acc GTR in GB||2.75|
|Scottish Widows UK Index Linked Tracker I Acc GTR in GB||2.74|
|Index : FTSE 100 TR in GB||-10.77|
According to these findings, investors who were short UK equity, and long Japanese government bonds would have avoided the worst of the downturn on capital markets.
Similarly, holders of UK index linked government bonds were spared, especially relative to the benchmark FTSE 100 stock market index.