Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Value managers top equity fund redemptions in 2021
Morningstar has released an interesting report that looks at a market metric that is often overlooked – fund outflows. Why do fund flows matter? They matter because they reflect all the cash that is flowing in and out of the fund. Naturally, when a fund has greater outflows, redemptions are outweighing new investment, usually because the fund isn’t performing well.
2021 may have been a record year for the ASX, but there were an unfortunate list of funds that recorded heavy outflows, despite beating their benchmarks. Here are the top ten funds for outflows and their returns.
The top spot without question goes to JANA Investors, which saw a whopping $1 billion flow out of the JANA High Alpha Australian share trust, more than halving its size. Despite posting one of the highest yearly returns, of 19.50% which beat the S&P/ASX300 Index return of 17.50%, the Jana High Alpha Australian Share Trust managed to record the highest outflows of any other fund, reducing its total assets under management to $837.4 million. Citywire says “Some investors were cashing-up for other investments, and others were switching their allocations based on what they saw were potentially more attractive returns.”
This is particularly true given the Australian market bounced back into recovery, leading the world out of Covid. Emerging markets are only just starting to enjoy a similar recovery.
In second place was the Russell After-Tax Australian Shares fund, which saw almost $800 million depart, followed by the Schroders Australian Equity fund, which lost $554 million. The redemptions out of the Russell Australian shares fund almost saw it almost fully redeemed having only $282.5 million in assets under management remaining. The Schroder Australian Equity fund was the best performing fund of the lot, returning 19.90% for the year, beating the index benchmark return of 17.20%.
