According to Square Mile’s latest quarterly Market Intelligence Report, Capital Accumulation as a desired outcome continues to dominate adviser interest, accounting for over half (51%) of all searches for investment outcomes via the Academy of Funds in Q3.
This was twice as many as Income which, at 25.5%, was the next most popular among those consulting the Academy of Funds to explore potential investment solutions. And while inflation continues to dominate headlines, research into strategies with the potential to hedge against this continued to fall, dropping to 11.8%, down from a peak of 17.4% in Q1 2022.
Square Mile’s quarterly MI Report is an extensive register of viewing patterns among users of the Academy of Funds, a depository of insight and opinion on all 353 active, passive and risk targeted funds* rated by the company’s 20-strong team of analysts. In Q3, there were 7,008 unique website visitors and 54,232 page views.
Of funds seeking to deliver Capital Accumulation, the Ninety One UK Alpha and Premier Miton Multi Asset Distribution funds were the most popular, as well as being the most researched overall with each receiving a 2.5% share of all views. The R&M UK Recovery and Baillie Gifford Strategic Bond funds made up the remainder of the top five most viewed strategies. At a group level, Baillie Gifford moved to pole position with 7.5%, up from fifth place in Q2, while Jupiter Asset Management and Schroders remained static at second and third place (5.9% and 5.6% of views, respectively).
The IA UK All Companies (13.7%) and IA Sterling Strategic Bond (9.5%) sectors remained the top two most searched for IA sectors with the latter falling slightly on the previous quarter. However, IA Mixed Investment 20-60% Shares and IA Targeted Absolute Return sectors continued to move up the rankings to third and fourth place (8.4 and 7.8% respectively), pushing IA UK Equity Income out of the top three, falling down to seventh place.
Square Mile’s Fund Dashboard, an interface through which advisers can access information across core fund selection criteria, saw a reversal in search behaviour on the previous quarter. Use of the Opinion pillar as a primary access point shrank from 36.0% in Q2 to 27.6% in Q3, while advisers entering via the ESG pillar saw an increase of over ten percentage points, from 26.0% to 36.2%. There was also a slight increase in Performance as a search term, with 22.4% up from 20.0%.
The Wellington Global Impact Bond fund reached the top of the Responsible Investment (RI) fund rankings with 8.2%, although its overall share was slightly down on Q2. FSSA accounted for the remainder of the top three researched RI funds with the FSSA Greater China Growth and FSSA Asia Focus funds registering 6.2% and 5.7% respectively.
Jock Glover, Strategic Relationships Director at Square Mile, said, “We have rarely seen a more challenging environment in which to make asset allocation decisions. In the UK, new Chancellor of the Exchequer has reversed the tax cuts set out in his predecessor’s ‘mini-Budget’ in an attempt to restore confidence in the economy. Meanwhile, the cost-of-living crisis continues unabated, with mortgage holders facing the additional squeeze of spiralling interest rates as the UK’s central bank strives to dampen inflation. Globally, we see the ongoing conflict in Ukraine intensifying, the real prospect of recession in Europe and the spectre of covid-related lockdowns in China all adding to investor concerns.
“Against this backdrop, it is interesting to note that strategies with the promise of Capital Accumulation continued to gain traction, perhaps a reflection that, with market sentiment so weak, there may be more upside to be had from assets offering some level of appreciation. Nonetheless at a sector level, caution still lingers. The IA Mixed Investment 20-60% Shares and Targeted Absolute Return sectors are both fishing grounds for investors seeking a combination of growth alongside capital protection.”