Square Mile MI Report: search for Income picks up considerably vs Capital Accumulation 

by | Jan 12, 2023

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Square Mile’s latest quarterly Market Intelligence Report has registered a notable decline in adviser research into funds seeking to delivering Capital Accumulation in the final quarter of 2022, with attention switching to Income-generating strategies.

While still the most researched investment outcome, Capital Accumulation’s share dropped by over 10 percentage points to 40.7%, down from 51% in Q3. However, interest in Income surged by 7.8 percentage points, accounting for one third of all views and suggesting that advisers are seeking strategies that can help their clients keep pace with spiralling expenses during an ongoing cost-of-living crisis. 

In line with this interest in Income strategies, the Aegon Diversified Monthly Income fund shared pole position as the most researched fund in Q4. This multi-asset vehicle aims to deliver a steady and rising level of income which is likely to be attractive given the economic backdrop in the UK. The fund accounted for 2.7% of all searches of actively managed funds, alongside the Ninety One UK Alpha fund, a Capital Accumulation-focussed strategy that seeks to offer capital growth regardless of the broader market outlook. Meanwhile, the LF Havelock Global Select fund rose through the ranks from 11th to third most researched fund with 2.3% of all views, up from 1.9% in Q3. 

The Wellington Global Impact Bond fund, another Income-oriented strategy that seeks to deliver a positive social and environmental impact, maintained its position as the most researched Responsible Investment strategy. Two strategies from First Sentier Investments – the FSSA Greater China Growth and FSSA Asia Focus funds – made up the remainder of the top three. Additionally, at a group level, First Sentier Investors rose to first place with 7.3% of all searches, pushing Baillie Gifford into second place at 6.2% with Schroders following in third place. 


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 354 active, passive and risk targeted funds* rated by the company’s 20-strong team of analysts. In Q4, there were 5,819 unique website visitors and 52,527 page views. 

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 surged by just under 10 percentage points, from 27.6% in Q3 to 37.2%, while advisers entering via the ‘ESG’ pillar dropped off by a similar level, from 36.2% to 25.6%. 

While the IA UK All Companies sector was once again the most viewed sector with a 14% share, the IA Sterling Strategic Bond sector fell from second place to fifth place. The IA Mixed Investment 20-60% Shares and IA Targeted Absolute Return sectors came in at joint second place with 8.5% of all views, with their popularity increasing steadily 


over the last two quarters. Liontrust remained the most researched group offering risk-targeted strategies, although its share fell 3.1 percentage points to 22.8% on the previous quarter. Premier Miton Investors, however rose strongly by 12.3 percentage points putting it at second place with a 20.2% share. 

Jock Glover Strategic Relationships Director at Square Mile, said, “While strategies that provide inflation protection experienced a considerable uptick in adviser interest in Q1 of last year, this had dropped back down by the final quarter. This reflects a broader feeling that inflation may finally be waning, and we expect headline rates to fall further in the coming quarter. The key question remains over where they will end up over the medium term. 

“Funds with the potential of Income as an investment outcome have always been in demand, but it is perhaps no coincidence that there has been such a strong uptick in adviser research in this area, coming at a time when a combination of inflation and higher interest rates are stretching household disposable income.” 


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