Caution is the watchword

A close look at the past year of trading highlights the difficulty for cautious managed funds of making money in such volatile conditions

A few years ago there were just a handful of funds in the IMA Cautious Managed sector. Today that number has increased dramatically, with a sharp upturn in the amount of money invested in the sector. The increased interest in lower-risk investments is understandable. In the early part of this decade, stock markets were in a severe downturn, with investors nursing heavy losses from the tech bubble and investments in other over-inflated assets. It is therefore no surprise that those who were brave enough to go back into the markets wanted lower-risk products. During the subsequent bull phas...