Why 2014 was another 'banner year' for trend-following funds

After five years languishing at the bottom of performance tables, the trend-following fund MAN AHL Diversity managed to produce a stellar return last year, as asset classes diverged.

The multi-asset fund returned 36% over the past year to 9 March, compared to the Hedge/Structured Product - Mixed sector average of 4.3%, according to FE. Manager Graham Robertson said many factors were pulling asset classes in different directions last year, creating opportunities in the process. Trend-following funds had one of their best years yet after almost five years in the doldrums of performance tables. In recent months, multi-asset managers have been preparing their portfolios for a breakdown in asset class correlations once more, following on from a year in which many trend...