The year 2020 saw major fluctuations and changes in global financial markets. Many investment funds performed poorly due to the COVID-19 pandemic and economic downturn. However, some funds were able to navigate the challenges and deliver strong returns to investors. An excellent investment fund brochure provides key details on performance, fees, risks, and other vital information. In this article, we will summarize the key elements that made certain funds stand out in 2020 as the best choices for investors.
Top returns with effective risk management
Some of the top performing funds in 2020 employed savvy risk management strategies to protect against market volatility while still capturing upside gains. For example, funds that took advantage of the drop in equity prices in March 2020 and increased stock exposure in time for the recovery saw significant returns for the year. Tactical asset allocation and utilization of options strategies enabled these funds to outperform peers.
Low fees enhanced net returns
In a turbulent year like 2020, low fund expense ratios became even more important. Every basis point that high fee funds take detracts directly from net gains. The most competitive investment fund brochures for 2020 highlighted exceptionally low all-in fees to investors. Passive index funds and ETFs benefited enormously from this fee advantage.
Clear explanations of risks and strategy
With amplified market uncertainty, a quality investment fund brochure must clearly communicate risks as well as the strategies in place to mitigate them. Fixed income funds with higher credit quality and adjustable bond ladders stand out for limiting exposure to default risk. Brochures should also detail risk models, sources of risk, and plans to maintain liquidity during periods of market stress.
Strong long-term performance history
Even in an anomalous year like 2020, funds with consistent long-term track records instilled confidence that they could continue delivering alpha and financial planning stability going forward. Brochures from top performing endowment funds highlighted 10+ year histories of beating benchmarks across multiple asset classes.
In a year of historic uncertainty, the best investment funds provided investors with strong returns, fee transparency, tactical risk management, and long-term outperformance. Key details on risks, performance metrics, and strategies separated excellent funds in competitive brochures.