Core funds perform better than value added: Inrev

Core funds performed better than added value funds in 2009, according to Inrev, the European sector organisation for the non-listed fund sector. Core funds returned -5.9% over the year while value added funds returned -14.3%. In local currencies, the Inrev Index returned -7.8% in 2009 compared to -19.8% in 2008.

'The negative impact of the different levels of gearing used by core and value added funds is still having a clear impact on the performance of the funds,' said Casper Hesp, Research Manager at Inrev. 'This is also supported by the fact that funds with a gearing level lower than 50% of GAV performed significantly better than those with more than 50%,' he added. Funds with gearing below 50% GAV returned -2.8% while those with more than 50% returned -17.2%.

The Inrev Index 2009 also shows strong variations in country performance across Europe. Multi-country funds returned -11.4%, which is below the headline return of -7.8%. An important factor behind this difference is the exposure of these funds to Southern European and other small European economies such as Central and Eastern Europe. In these countries capital values fell harder than in the rest of Europe.

The 2009 Index represents Inrev’s largest ever sample with 258 funds representing EUR 132.7 billion of total gross assets. This is around 75% of the total institutional non-listed universe.

Andrea Carpenter, Interim CEO, Inrev said: 'The quality of coverage now means the Inrev Index is a useful tool for investors and fund managers for performance evaluation. As we have developed this tool we have made sure that the amount of information available to members has grown. We have continued to support this with the recent launch of the Index Analysis tool which allows Inrev members to create tailor-made indices from the Inrev Index sample.'