Because Bloodhound runs its investment strategies starting on January 1st. we are often asked whether the performance of the strategy would be maintained if you started, or added to, a fund at another time of the year. We have recently been able to analyze this effect and illustrate it below with Lion, a high performing and therefore probably more volatile strategy. Here are the results.
This chart shows the average return one year after investment, as a function of the day of the year the investment was made; there are 252 days in the year, and since we have 23 years of data, there are 23 different results for each day. We also show the standard deviation of the returns.
The blue line shows the return, and you can see is that there appears to be a variation between a 41% and 59% return, with the end of March and the last three months of the year generally offering somewhat higher returns. BUT, if you look at the standard deviation line, it shows that there is higher variability at those periods, so it is not at all certain that the apparent trend is statistically significant!
The second chart also shows the return based on investment on different days of the year, but this time, the lines represent the average return after investments of different periods than the one year that we showed above. They cover 3 months to 5 years. Note that the returns for periods longer than 1 year, are annualized, where those for less than a year are not, which is why they are lower.
What you can see is that the longer the period after investment, the less it seems to depend on the day you invested. Our conclusion is that the day you invest in a strategy does not seem to be a signifcant factor in its performance.