Managers boosted returns by ratcheting up more risk in their investments for the insurance market in the second quarter of 2013, according to a new CAMRADATA report.
In the euro and dollar fixed income one to five-year duration space, Insight was the top-scoring manager with 6.5% in an asset class where all managers outperformed cash by a minimum of 0.8%.
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In USD one to three-year duration, Payden and Rygal topped the universe with Pioneer doing the same in three to five-year duration. All managers analysed took more risk than the benchmark to gain this out performance.
This was also the case in USD bank loans – more risk equated to out-performance. Invesco took top spot with 1.2 per cent over its nearest rival with no extra risk.
USD high yield saw wide variation between 27 managers in the universe, ranging from negative to 13.4% posted by top-ranked manager Natixis, which took four per cent more risk to out-perform the benchmark by 3.3%.
In absolute return multi-asset and fixed income, Henderson was top in the euro universe and Insight headed GBP. Fund of hedge funds results over the last three years showed volatility contributed to lower than expected returns. Magnitude, with seven per cent, earned top ranking.
CAMRADATA founder and managing director Steve Butler said: "The Federal Reserve signal that it may ease asset purchases triggered volatility towards the end of this quarter. Eurozone economic data is still limp despite an interest rate cut to 0.5 per cent. Uncertainty remains the watchword but our survey shows managers building solid performance for insurance investors in spite of challenging conditions."
