Global Equity

Global Equity funds’ performance ranges from -25.83% to slightly over 89% over the last 52 weeks (ending December 31, 2010), in EUR terms. The best 5% of the funds outperform the market (pegged to the MSCI World TR Index) by 12.6% and the worst 5% underperform by approximately 25%.What role do favourable style allocations play? We take a closer look at common factors describing the best and worst funds on an aggregate basis. When funds are aggregated in a group, their common factors crystallize and specific bets are diversified away, which provides the basis for such an analysis. Our analysis suggests that the top- and bottom-performing funds, on average, invested in quite different sectors which impacted their performance. The performance of the top 5% was mainly a reflection of their selection and timing skills, having over weighted their exposures to Japan and Emerging Markets, as well as a sizeable exposure to Cash. Conversely, the bottom 5% display negative selection and timing skills, with very high exposures to Global Clean Energy and Cash. Using an attribution framework, we were able to quantify the impact of each bet on the overall performance. Note that our conclusions may change if a different timeframe is used to select the best/worst funds.