Discretionary portfolios fail to outperform in 2012

Discretionary multi-asset portfolios failed to outperform their retail investment peers during 2012, according to figures from Asset Risk Consultants (ARC) Private Client indices.

The indices, which are an average of wealth manager performance generated using data sent in from managers voluntarily, showed that its four indices mostly underperformed the four IMA Mixed Investment sectors.

ARC Sterling Cautious index, which contains portfolios with a relative risk of between 0 per cent and 40 per cent of world equities, returned 5.9 per cent during 2012, while funds in the IMA Mixed Investment 0%-35% sector returned an average of 6.2 per cent.

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The ARC Sterling Balanced Asset and the ARC Sterling Steady Growth indices slightly underperformed the Mixed Investment 20%-60% Shares and the Mixed Investment 40%-85% Shares sectors respectively.

The 10.2 per cent return of the highest-risk ARC index, the ARC Sterling Equity Risk index, beat the average return of 10.1 per cent in the IMA Flexible Investment sector.

However, the Equity Risk sector is designed to include funds with a relative risk of between 80 per cent and 110 per cent of world equities and it underperformed the MSCI World index, which generated 10.7 per cent in 2012.

The figures from the ARC indices are subject to change, though, as the figures for the fourth quarter are estimates from ARC based on preliminary data.