Considering the volatile nature of stock markets around the globe over the last year, UK institutional fund managers turned in some pretty good performances on their mixed funds. According to figures from benefit consultants HSBC Gibbs, the median return for monthly dealing institutional mixed funds, over the 12 months to end October 1997, was 13.8% allowing for spreads and management charges.

Colonial which topped the list with a 17.9% return, attributed its success to an active policy, particularly on the asset allocation front. Head of UK equities, Jeff Keen explains that the fund was heavily weighted to UK equities a year ago - We believed most of the bad news was already in the price," - but then moved into overseas equities in the second quarter of 1997 before switching back to the UK. Currently the fund has 60% plus in the UK (still higher than most of its competitors) and 20% overseas.

By contrast, Martin Cle-ments, assistant director of Royal Sun Alliance Investment Management says that stock selection rather than asset allocation was mainly responsible for their 17.4% return. "I can't pretend we got the timing right," he says. "We built up cash too early." The fund has re-cently been winding down its cash position, reinvesting in UK equities and gilts.

Stock picking in the UK equity sector was also the main factor at Sun Life of Canada (SLC), where Jim Owen, head of client services says that they were caught out like everyone else by the recent volatility. More bullish than many on property, SLC nevertheless reduced its holdings from 12% to 6% over the period. David Hunt"