Leader: The classic classes
Amid many a fund group's interim results, two trends appear to be prevailing in the industry halfway through the second quarter - figures seem to prove the resilience of traditional investment areas against market volatility (despite a rather erratic market performance throughout the summer) and also a realisation of where weaknesses lie.
Over the past few weeks, results from some of key names have showed how February's short-term strategies influenced Q2 results.
A shared aim of achieving more competitive investment performance across fixed income, equities and property has had a positive impact on the results of F&C, Gartmore, Jupiter and Liontrust, to name a few.
So it wouldn't be foolish to suggest the asset managment sector is benefiting from decent momentum, derived from investing in the 'classic' asset classes.
Still, if 2010 started on a strong note, with most groups benefiting from good market performance, it is becoming increasingly unable to ignore areas where a swift intervention would boost managers' balance sheets - the reduction of debt through earnings and a reduced dividend.
In his group's interim report last week Alain Grisay, chief executive of F&C Asset Management, highlighted this apparently generalised trend when he said: "After a strong start to the year, the second quarter saw a sharp downturn in equity indices and renewed dislocation in fixed income markets as investors became preoccupied with concerns about government debt levels in Europe".
It may be all good things come to an end, but so far, this earnings season has demonstrated the advantages of taking a steady approach to asset allocation. And, if this is the case at group level, why not take heed from them when reviewing client portfolios.
