Dubai: According to Markowitz, the most efficient way of making money is to put 100 per cent of your savings into the asset that goes up the most. The problem of course is: even the greatest brains don't seem to know what asset that is. Our knowledge is all past tense, and the best we can do is to tell you which asset you missed out on. However somewhere between guessing the future with the aid of the past, your friend -‘the trend' emerges.

What factors drove the information selection process ?

So, based on the fund manager motto: ‘the trend is your friend', we have re-jigged the ‘Benchmarks' section below with the aim of following ‘Fund Performance' trends in the most-watched markets of Gulf News readers. The information source is Financial Express, and within the results for ‘All Markets' the universe consists of a staggering 43,000-plus funds. So yes, we have made some assumptions about what market information readers would like to follow. We've assumed, for example, that whilst Japan is still one of the top three equity markets in the world- it doesn't carry much local interest. Instead we took six factors into account: firstly, the importance of size. When it comes to equity markets, the US still accounts for over 50 per cent by capitalisation of the MSCI Global equity index. In any comparison of data, the relative performance of assets against key US benchmarks for cash, bonds and equities is therefore always quite useful. Especially in a world where Gulf News readers have their income tied to the US dollar.

The second driver was the Gulf News reader profile which is why we have focused on MENA, Indian, UK, European and Australian indices. Gulf News readers will no doubt tell us if other indices need to be included into the mix. The third driver is the so-called "de-coupling" of emerging markets from mature markets. This information is captured at two levels: within the first column where the MSCI Mature and Emerging markets are mixed in with the Dow global Islamic index; and also at the foot of the first column where the BRIC countries are covered together with Australia (for no other reason than convenience).

The fourth driver was the increasing separation of ‘real assets' from financial assets, and the fifth driver lies in the increasing usage of Alternative Investment strategies. These trends are covered with the commodity, resources and alternatives sections. The sixth driver was to seek out best-to-worst performances over one year and five years to provide an insight into the risk spread within given markets.

What does week one tell us?

The stand-out information of week one is the comparison of five-year performances against one-year performances. Wherever you look, the post-Lehman's scars are clear to see. The fact is, as pointed out in the last Barclays Gilt Study (a misnomer of a title, but a must-read for economists and market watchers); the ‘Lehman's effect' wiped off 10 years of savings. Virtually nowhere was safe over five years.

Evidence of this is the best five-year fund return from the 43,000 plus universe was a meagre 37.72 per cent from Meridian's Gold and Resources Fund. That's a paltry 7.54 per cent p.a. for five years for the top return. The significance of this is massive- you should not be falling for sales lines revolving around lines like: ‘I can do better than that', because ‘that' (ie bad performance) happened toeveryone.

Star performance

The star performing areas of the last five years also reflect today's ‘trends'. Reading today's fund manager pitches, their ‘flavour of the month' pitches echoe the top five areas of the last five years: resources, Latin America, Russia and India.

Much of the performance has been in the last 52 weeks. The Valetta group clearly has something to celebrate, as they have two funds in the top five over one year: a global equity fund and a hedge fund. The best return being a, ‘nice-if-you-can-get-it': 332.58 per cent. Looks like a lotto-winning number when compared to the second placed fund some 108 per cent below it on 224 per cent for the rolling year. Squeezed in-between the Valetta's are a commodity fund and an equity risk featuring, again - Latin America.

Does that mean we should all go out and buy Valetta? Well, I will certainly be googling them. Their numbers deserve inspection. However, the results will change, and its important to note that ‘Best Performance' often carries risks that are unacceptable to the average investor.

There are more fund managers targeting ‘second quartile' performance because of their search for risk-managed performance and because their benchmarks drive them to control volatility. The performance numbers below are provided in order to show various risk-spreads they are certainly not provided as, ‘buy recommendations'.

Sean Kelleher is the Chairman of Mondial Financial Partners.