At the same time, bond markets started a measured slow-down as Federal Reserve tapering of quantitative easing in the US became a reality.

Overall, it was better to be in those sectors with the highest equity content. The average fund in the IMA Flexible Investment universe delivered 14.54 per cent in 2013, while the Mixed Investment 40-85% shares returned 14.47 per cent, the Mixed Investment 20-60% shares 8.85 per cent and the Mixed Investment 0-35% shares just 4.2 per cent.

This also applied within fund sectors. FE Analytics data shows the average fund in the Mixed Investment 40-85% shares sector had a 70.3 per cent weighting to equities, with all of the funds in this sector overweight equities, bar two. Although the top-performing fund – CF Odey Portfolio – has lower equity exposure, it has an extra 7 per cent in hedge funds, which have a high exposure to equities. Seven of the top 10 funds in the sector are at or near maximum equity exposure (for example more than 80 per cent)

The same was true in the mixed asset 20-60% shares sector, although the contrast was less marked. Data shows that the average fund in the sector has an equity weighting of 50 per cent. Among the top 10 best-performing funds over 2013, fixed income was kept to moderate levels. The Kames Ethical Cautious Managed fund, for example, had roughly 38.2 per cent in fixed income. The top performers with lower equity weightings, such as Invesco and Artemis, tended to have a higher proportion in non-investment grade bonds, which also had a strong year.

That said, it was not enough merely to have a high weight to equities; it had to be the right sort of equities as well – cyclical rather than defensive. This was the great strength of the Kames fund. Manager Audrey Ryan says it included selective domestic and financials plays alongside opportunities in businesses with ‘self help’ characteristics and those with technology related growth such as online gaming growth beneficiaries, Playtech and Perform.

She adds: “Recently, the fund has increased exposure to global industrial plays, specifically those with European exposure. There has also been a move towards businesses likely to gain from improving corporate cap-ex spend.”

In other words, the fund positioned itself towards cyclical stocks from early in the year and has therefore participated fully in the recovery.

At the other end of the spectrum, those funds holding defensive equities suffered, failing to keep up with the rally. For example, the L&G Multi Manager Income fund suffered from having the ‘wrong’ type of equities, holdings stocks such as BAT.

Clive Hale, partner at Albemarle Street Partners, says: “Within equities, it was important to be selective. The US and UK markets had good years, while Europe and emerging markets were more mixed.”

One of the key characteristics of the top performers was not only where they were invested, but where they weren’t. Few, if any, held emerging market debt and emerging market equity holdings were also low. Equally, few held gilts. In contrast, funds such as the Aviva Investors Diversified Strategy had relatively high gilt exposure combined with a 15 per cent exposure to emerging markets – 10 per cent in emerging market bonds and 5 per cent in equities. This ensured that it languished towards the bottom of the league tables over the year.

Some managers were still holding gold during the year, often as a hedge against inflation, but it proved a painful bet during 2013: the gold price slipped from more than $1,600 an ounce at the start of the year, to roughly $1,200 at the end. Managers such as Sebastian Lyon of the Troy Trojan fund saw their long-term track record dented by holdings in gold over the year. Mr Hale says: “Gold was a nightmare last year for those managers trying to hedge the downside risks.”

In general, it was those who were too cautious that paid the price. It was a year for risk takers, but it had to be the right kind of risk – cyclical equities, high yield bonds, but avoiding emerging markets and commodities. It was a year to test the mettle of any mixed asset manager.

Cherry Reynard is a freelance journalist