In Lyxor, we believe that an intelligent combination of active and passive management can play a key role in optimizing portfolios. our
a new publication for the performance in 2018
covers 32 active investment management universes, ie almost 7,000 funds and 1,600 billion euros of funded funds. Marlène Hassine Konqui, Head of Research ETF Lyxor, shares the main conclusions.
10 key points that need to be memorized
1. 2018 was a difficult year for active managers, if not one of the toughest for more than a decade. Political and economic uncertainties, the almost universal collapse of asset classes and the lack of a clear path to interest rates threatened the alpha generations.
2. Only 24% of active managers managed to overcome in 2018, well below 48% of 2017 and an annual average of 36% in the last 10 years.
3. The best performers were managers of American and American and European growth stocks with small drops. They were the only ones who significantly exceeded their average annual performance in the last ten years. In fact, 75% of them exceeded, significantly above the average of 41% over the past ten years. On the other hand, the worst hit were the active debt managers in emerging markets, corporate bonds of the United States, world bonds and French stocks.
4. The choice of a fund capable of overcoming in 2018 was more difficult than in 2017. Generally, the dispersion of yields against the long-term average was even lower than in 2017.
5. Only 27% of active capital managers exceeded, a dramatic decline of 51% in 2017 and an annual average of 38% over the past ten years. At stake: chaotic market and insufficient defensive positions.
6. Bond's managers were the worst performers only 18% improved, compared with 41% in 2017. By comparison, the annual average in the last ten years has risen to 33% over performance. Managers with fixed assets were fined almost on all bond markets this year. Indeed, 90% of the universe we cover exceeds their long-term average charges. Only euro bond issuers with high yields meet their average performance for more than ten years.
7. Active funds clearly outperform more over the bear markets; on the other hand, it is more difficult to continue to exceed them during the subsequent bull market. Identifying a fund that can be constantly overcome in different market phases is a challenge.
8. The results of active managers disagree with the popular belief that they are more likely to overcome in less efficient markets.
9. The year 2018 was also marked by hedge funds long shorts in accordance with the UCITS Directive. However, they generally outperform their benchmark index compared to traditional active funds.
10. Allocation between investment vehicles (assets in terms of liabilities) within the portfolio is just as important as the allocation of resources to optimize portfolios and generate long-term performance.
What can we expect in 2019?
2019 promises to be as difficult as 2018. Monetary policy, which has become even more acceptable, reduces volatility, while economic and political uncertainties continue. Brescott, trade tensions, slower growth in Europe and China and low interest rates are factors that could continue to diminish market performance. In our opinion, in order to generate returns, the choice of a real investment vehicle will be just as important as the choice of asset allocation.
How to use this study
This research is designed to help investors optimize their portfolios by choosing the right investment vehicles for each class of assets. If you are a professional investor, we invite you to consult the full version of the study on the website of
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Source of all data: Morningstar and Bloomberg, period between December 31, 2008 and December 28, 2018. Past performance is not a reliable indicator of future results.
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