Commenting on the AFI Report, Zenith Head of Multi-Asset & Income Research Andrew Yap said that for the same period, returns generated across Zenith’s universe of rated managers were varied, with a significant degree of dispersion recorded across a range of investment styles. “This disparity in returns was most pronounced in Zenith’s ‘Bonds’ sub-asset class, where few rated managers demonstrated an ability to outperform”.

The Zenith Review placed significant emphasis on providing the reasoning as to why the fortunes of AFI managers may become increasingly contingent upon their ability to bolster returns through a more sustainable contribution from duration and yield-curve strategies.

This has been traditionally where sector participants have found it difficult to consistently add value”, continued Yap.
In addition to this, Zenith also delved into the measures and explored reasons why those sector participants became increasingly willing to add global allocations to their AFI portfolios, together with a review of mandate tolerances as this extends to the use of global rate, curve and credit strategies.

“We conclude by proposing an alternate methodology for assessing funds with similar investment constraints, splitting constituent members of our ‘bonds’ sub-asset class between three different styles including core, core plus and low duration strategies”, said Yap.

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