- Royal London Sustainable World Trust fund most viewed responsible fund
- Artemis Global Select fund retains position as most viewed fund
- Advisers looking away from the UK towards global, Asian and US markets
Jupiter Asset Management was the most researched group among advisers according to the quarterly Market Intelligence Report released today by Square Mile Investment Consulting and Research (Square Mile). While the Artemis Global Select fund was the most viewed fund overall, at a group level Artemis placed fifth, behind First Sentier Investors, Schroder Unit Trust Managers and Baillie Gifford.
The weak performance of UK equities relative to other markets is likely to have had an impact on the funds researched by advisers as they try to navigate challenging market conditions on behalf of their clients. All bar one of the ten most viewed funds in the Square Mile Academy of Funds were either global, Asian or US-based. As well as the Artemis Global Select fund, other constituents of the top ten included the Dodge and Cox Global Stock fund, the First Sentier Global Listed Infrastructure fund, the JPMorgan US Equity Income fund and the Baillie Gifford Japanese Income Growth fund. The only UK fund to feature in the top ten was the Schroder Recovery fund, perhaps due to its contrarian approach to UK equities. This preference for non-UK strategies was also reflected among views of passive funds.
Square Mile’s Market Intelligence Report captures viewing patterns among users of its Academy of Funds which provides insights and data on all funds rated by the company’s 18-strong team of analysts. For the first time it also captures research trends of those using the recently launched Fund Dashboard which provides a snapshot of the five pillars of a fund of most interest to advisers: opinion, performance, risks, costs and ESG. Of these, ESG was the starting point for 43% of searches, highlighting the steady growth in interest in how ESG considerations are integrated into investment processes. Opinion and performance level pegged at 19% and 18% respectively.
The most searched for metric within the Fund Dashboard was the percentage of time a fund had met its performance objective over its investment time horizon, followed closely by those funds with a Responsible rating and then a group’s ESG score. Among funds with a Square Mile Responsible rating, Royal London Sustainable World Trust fund was the most viewed, with First Sentier Great China Growth fund and the Aegon Ethical Equity fund in second and third place.
At an asset class level, equities continued to dominate, accounting for 55% of all views, with interest in multi-asset increasing to 28% and interest in fixed income dropping off to 16%. Property remains deeply out of favour, probably as a result of the widespread gating of funds within the sector this year. With the continued rise in markets over Q2 and Q3, investors are more focussed on capital preservation and income as investment outcomes than they were at the end of Q1, while interest in capital accumulation is weakening.
James Glover Chief Operating Officer, Research and Consulting at Square Mile, said, “There continues to be a pervading sense of uncertainty globally. The final quarter of this year sees a potential change of incumbent in the White House, a new Japanese prime minister bedding in and a continued face-off between the UK and the EU as Brexit negotiations enter their final phases. Regardless of geography, the Covid 19 pandemic and its ongoing impact on the global economy remains the biggest unknown. Nonetheless, in many equity markets the recovery that started in Q2 continued into Q3, with notable exceptions for the UK Equity market, which fell over the quarter and many European markets, which traded sideways in a fairly narrow band.
“Against this backdrop, our Academy of Funds has seen a strong preference for funds which offer exposure away from UK equities which has been matched by steady outflows from the asset class. Regardless, ESG and Responsible Investment continue to build up a head of steam as advisers seek strategies that can align their clients’ desire to improve society, protect the environment and halt climate change as well as meet their long term financial goals. This is clearly reflected by the research advisers are undertaking on the ESG credentials both of funds and the groups that offer them, as well as those funds which have an explicit mandate to invest responsibly.”