Can the comparison of three-year risk-adjusted equity fund returns year over year predict fund flow trends? Such is the hope of Keefe, Bruyette & Woods (KBW), in its latest quarterly equity fund performance report titled “Equity Performance Bubbles: A Look at Risk-Adjusted Returns,” released Tuesday.
The report, which compares the above-mentioned returns as of August 31 with those calculated one year ago, evaluates the risk and return and how they relate to fund inflows or outflows. Results indicate strong returns for a number of funds, including T. Rowe Price, Eaton Vance, and Waddell & Reed; Calamos shows the most improvement, while many of Alliance Bernstein’s funds’ relative positioning continues weak.
Using the Simfund database of Strategic Insight, scattergraph diagrams were calculated for “a wide variety of asset managers,” according to the report. Those diagrams plot “the three-year risk-return profile of individual equity funds managed by a particular asset manager relative to other funds in the same Morningstar category.”