Specialist multi-asset managers Midas Capital has admitted its highly diversified value-based approach has performed poorly since market turbulence began last year.
The £722m CF Midas Balanced Income fund is fourth-quartile in the IMA Balanced Managed sector over one year, down 9.1%; while the £552m CF Midas Balanced Growth fund has fallen 10.5% over the same period.
Midas says although it is operating in the midst of unusual markets, its approach “has not worked well since last summer”.
“Recent months have re-enforced narrow leadership in a range of markets and sectors, which began to develop last year, particularly among assets associated with the long term Asian growth story,” it says.
“This growth/momentum focus has favoured managers with a more concentrated approach, and has certainly not favoured our very highly diversified, value based more contrarian style.”
However, Midas is confident both funds will perform well in the future, as a significant minority of assets are trading below natural value.
“We remain of the view that this value will emerge over time, and that over the longer term, investors will be well served by a more diversified, multi-asset approach,” Midas says.
“We are strongly focussed on returning the funds to their longer term pattern of generating attractive returns without taking undue risk.”IFAonline
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