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Revealed: funds with the biggest outflows in 2016

On top of the list is a global fixed income strategy that experienced outflows of CHF7.8 billion.

This year was challenging for many strategies, with the Brexit vote and US presidential elections bringing a lot of uncertainty for investors.

2016 was most problematic for European equities, which experienced CHF22.4 billion of outflows. The second worse in terms of the amount of assets lost was Japanese equities, with CHF12.8 billion of outflows.

Mixed assets - absolute return, on the contrary, saw CHF11.2 billion of inflows, while the second-best performer was Alternative Ucits - multi strategy, which attracted CHF10.3 billion, demonstrating the appetite for all things alternative in an environment of negative interest rates and volatile equities.

Over the coming slides we take a look at the five funds that experienced the biggest outflows this year, with the fund that tops the list losing CHF7.8 billion.

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5. Ethna-AKTIV A

Outflows: CHF4.0 billion

Fund manager: Luca Pesarini, Arnoldo Valsangiacomo

The fund invests in all types of securities, including equities, bonds, money-market instruments, certificates and fixed-term deposits. The total proportion invested in equities, equity funds and share-type securities may not exceed 49%.

Two major dips this year the fund experienced in February, June and November, moving in sync with the sector’s average.

According to November factsheet strategy’s biggest exposure is bonds (52.60%). It also has a significant exposure of 27.73% to cash.

The top positions of the fund are wells Fargo (3.23.%), JPMorgan Chase (2.88%), and AEGON NV FRN.

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4. BGF Global Allocation

Outflows: CHF4.5 billion

Fund manager: Dan Chamby , Aldo Roldan , Dennis Stattman

The fund invests globally in equity, debt and short term securities, of both corporate and government issuers.

In normal market conditions the strategy invests 70% of its assets in securities of corporate and governmental issuers.

Two biggest dips in performance of the fund over the last year were in February and June.

The strategy is underweight fixed income against the benchmark with 26.43% exposure against 40%. It also has a big cash exposure of 13%.

The fund is underweight North America fixed income by almost 11% and overweight emerging markets fixed income by 4.32%.

The top three holdings are Apple, Alphabet and Marathon Petroleum.

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3. Polar Capital Japan

Outflows: CHF5.5 billion

Fund managers: Gerard Cawley, James Salter

The fund aims to achieve long term capital growth investing in companies listed in Japan. The strategy may hold cash when the fund managers find it appropriate.

The strategy takes 87th place out of 92 in the category Japanese equities over the last three years. Two major dips this year the fund experienced in February and June.

The average fund manager in the sector returned 20.4% over the last three years, while the Polar Capital Japan returned only 8.7%.

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2. Templeton Global Total Return

Outflows: CHF6.9 billion

Fund manager: Sonal Desai, Michael Hasenstab

The Templeton fund managed by Michael Hasenstab and Sonal Desai invests in fixed income securities be they investment grade, non-investment grade issued by government issuers worldwide. It can also use various currency-related transactions involving derivative instruments.

The strategy demonstrated a good performance over the last five years, returning 15.3% in Swiss frank terms against the average fund manager returning 13.3%.

However, the strategy started struggling in the beginning of 2016 losing 2% of return during the year and falling below the average fund manager, who returned 1.3% over the same time frame.

he biggest exposure of the fund is Mexico (17.22%), followed by Brazil (14.52%) and South Korea (9.55%).

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1. Templeton Global Bond fund

Outflows: CHF7.8 billion

Fund manager: Sonal Desai , Michael Hasenstab

The global bond fund invests in a portfolio of fixed and/or floating-rate debt securities and debt obligations investment and non-investment grade.

The biggest country exposure of the fund as end of October 2016 is Mexico with 23.07%. The second position is South Korea with 15%.

The fund has a similar track record to the Templeton Global Total Return fund: strong long-term returns but a disappointing short-term performance.

Over the last three years the fund lost 5.3% taking the 85th place out of 88 in Citywire global bonds sector and undershooting an average manager’s total return of 6%.

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