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Rating:Go-Anywhere PMs Suffer as They Miss U.S. Market Rally Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, August 06, 2012

Go-Anywhere PMs Suffer as They Miss U.S. Market Rally

News summary by MFWire's editors

Fund managers known to be "go-anywhere" investors are hurt by low stakes in U.S. stocks and bonds.

The Wall Street Journal reports that PMs opted for global markets, missing big rallies in the U.S. market.

Charles Lardemelle, co-manager of the $9 billion IVA Worldwide, saw its fund moving down to the middle of Morningstar's world-allocation category. The fund used to outperform peers in its three-year average annual return.

"We've had a very difficult 12-month period, that's for sure," Lardemelle said.

IVA Worldwide invested in beaten-down shares, which they believed would survive the eurozone crisis but turned out to be a "value trap in Europe," Lardemelle said.

BlackRock Global Allocation [profile] suffered the same fate because it invested in companies outside the U.S.

"We tend to have a headwind or tailwind depending ... on whether the US markets and the US dollar are outperforming or underperforming," PM Dennis Stattman said.

Michael Avery, who co-manages Ivy Asset Strategy, also suffered as stock holdings in Europe and Asia dropped by 8.6 percent over the 12 months through July. They also missed the rally in longer-term US bonds.

"We were absolutely correct on discerning the macroeconomic environment. What we got wrong in hindsight was that…investing as close to the U.S. as possible was the winning strategy," Avery said. 

Edited by: HFD


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