Outsourced CIOs in the U.K. made no significant changes to their investment strategies following the onset of the COVID-19 pandemic, but those with more risk in portfolios took huge hits in the first quarter of 2020.
Analysis of 22 growth portfolios run by 18 OCIOs in 2020 showed that those managers with the highest returns in 2019 — due to high equity and market exposures — in general suffered some "hair-raising losses" in the first three months of last year, XPS Pensions Consulting said.
Its latest FM Watch report, outlining the findings of the analysis, said those managers with more risky portfolios lost up to 14.5% in the first quarter of 2020. However, that strategy then paid off as markets rebounded and recorded record high gains.
Only two of the 18 OCIOs made investment gains in the first quarter, of 1.8% and 0.3%. OCIOs were not identified in relation to their returns.