Value-added funds outperform core for first time in 3 years

Value-added funds outperformed core funds in the second quarter of 2013 for the first time since 2011, according to Inrev's Quarterly Index.

Returns on value-added funds amounted to 1.44% in Q2 compared to 0.58% for core. Total returns were up 0.73%.

'There are some significant changes in the second quarter of 2013 which could indicate that parts of the market are well on the road to recovery,' commented Casper Hesp, director of research and market information at Inrev.

He added: 'Value-added funds and closed-end funds outperformed core and open-ended funds for the first time in two years, which shows that investors are beginning to step up the risk curve. This is an encouraging sign.'

Closed-end funds outperformed open-end funds for the first time since 2011, with closed-end funds at 1.03% and open-ended funds at 0.57%.

Central and Eastern European funds had the best performance in Q2 2013 with a 1.25% increase but funds with a Southern European strategy suffered a drop of -1.77%

Western European (0.79%), pan-European (0.78%) and Nordic funds (0.49%) also showed positive returns in Q2 as did funds with a multi-country strategy (0.37%).

For single-country funds, France (1.63%), Germany (1.03%), Finland (1.72%) and the UK (1.59%) showed positive returns, but the Netherlands continued to struggle (-0.06%) and Italy also recorded a negative performance of -0.84%.