One of the most common refrains we hear when lunching with a fund manager is that the prevailing macroeconomic climate isn’t relevant to how they do things - their fund will be completely unaffected.

Asset Allocator has not yet had the pleasure of lunching with the folks behind the Amati Precious Metals fund but the latest Fundwatch data from the multi-manager folk at Columbia Threadneedle shows the power of macro. 

It moved from being in the 100th percentile to the 1st percentile of all funds in the IA universe during the second quarter of this year, with three of the top five best performing funds being within the commodity and metals universe. 

This Amati fund isn’t owned by any of the allocators we follow - the most owned commodity fund is Invesco Physical Gold ETF, which is owned by four of the allocators we cover, while iShares Physical Gold ETF, which is owned by three of the allocators we follow.

No other commodity fund is owned by more than one of the allocators on our database. 

More broadly the data shows no fund managers in the IA Corporate Bond, IA UK All Companies sector or IA Corporate Bond sector achieving top quartile returns consistently over the past three years to the end of the second quarter of 2024. 

The metric used is top quartile performance on a rolling three year period. 

At the other end of the distribution, it’s the Japanese equity desks that are in the best position when it comes to the next bonus season, with 9 per cent of funds in this sector delivering top quartile returns. 

IA Strategic Bond sector managers were the least consistent over the past three years to the end of the second quarter of 2024, with just 13 per cent of funds beating the median return, median return itself being a lower hurdle to jump over than top quartile return.

And as the raison d'etre of the strategic bond sector is to be “go anywhere” mandates, the macro should matter less for those folk but, as we have referenced in the past, strategic bond funds have been out of favour as a result of many of the managers getting their duration wrong, with high profile exits from the sector as a result. 

Being wrong about duration is of course, one of the great macro calls, and hard to come back from with individual security selection. 

As markets coalesce around a narrative of lower inflation and interest rates, it will be interesting to revisit this theme in a years time.