Wealth managers recover second quarter losses

Wealth managers have largely recuperated their second quarter losses during July and August, according to Asset Risk Consultants (Arc).

In its analysis of private client portfolios, Arc found May and June were difficult months as wealth managers struggled to cope with the extreme volatility.

However, in its latest report, Arc findings show most portfolios enjoyed positive returns in July and August following sharp losses in the previous two months.  

However, while the defensively positioned portfolios grinded out results, the aggressive ones struggled in August.

The Arc Sterling Cautious index, which measures the most conservative wealth manager portfolios, enjoyed positive returns of 1.4% in July and then again in August. This contrasts with losses of 1.27% and 0.83% during May and June.

Likewise, the Arc Sterling Balanced index rose 2% and 0.7% in July and August after falling 2.52% and 1.75% during the prior two months.

Meanwhile, the performance of the Arc Sterling Steady Growth and Sterling Equity Risk indices was mixed.

The Arc Sterling Steady Growth index, which looks at portfolios that have a target relative risk of 60-80% of world equity markets, rose 2.5% in July and was roughly flat in August, falling 0.1%. This follows a loss of 5.74% during the previous two months.

The Arc Sterling Equity Risk index, which has a target relative risk of 80-110% of world equity markets, was more volatile and rose 3.6% in July before falling 1% in August. During May and June the index fell 4.08% and 3.26%, underlining the difficulties of operating in such a choppy market.