Fundhouse: SLI GARS return drivers pose concentration risk

Lack of diversification in returns

A recent report on the Standard Life Investments GARS product by fund rating service Fundhouse has revealed only 15 out of 127 strategies contributed the bulk of the returns for the strategy since inception.

The £26bn fund, led by head of multi-asset Guy Stern (pictured), has struggled with performance in the past year, reporting underperformance in three out of the last four quarters. This culminated last quarter with the absolute return fund reporting losses of 3.5%, the worst performance since 2008. In a report on the strategy, Fundhouse said it had expected the portfolio to provide a diversified source of return across all asset classes, which would mean it was able to meet its goals regardless or whether equities or bonds are in favour. However, it found this was not the case, wit...