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The funds that the professionals couldn’t take their eyes off in 2018

03 January 2019

Using the FE Analytics Market Intel Tool, we reveal the funds that became more popular with professional investors in 2018.

By Gary Jackson,

Editor, FE Trustnet

Baillie Gifford AmericanFundsmith Equity and CFP SDL UK Buffettology are some of the funds that benefited from rising interest from professional investors last year, FE Trustnet can reveal.

As we pointed out yesterday, 2018 was a difficult year for investors to navigate as issues such as the US-China trade war, Brexit and tighter monetary conditions hit sentiment hard. With stock markets around the world posting low or negative returns, most funds failed to generate gains for their investors.

In light of this environment, the FE Analytics Market Intel Tool shows us what financial advisers, wealth managers, multi-managers and other investment professionals were researching over the year.

Change in sector research share between 2015-17 and 2018

 

Source: FE Analytics Market Intel Tool

To see which areas of the market were being more heavily researched, we compared each Investment Association sector’s total factsheet views in 2018 with its traffic for the previous three full years. The change in research share can be seen in the above chart.

This data shows that, on a sector level, multi-asset solutions captured the biggest increase in interest last year. The share of research going into IA Mixed Investment 40-85% Shares funds climbed to 6.55 per cent of all the Investment Association factsheet views on FE Analytics; this is up from 6.14 per cent over the prior three years.

Other multi-asset peer groups like IA Mixed Investment 20-60% Shares and IA Flexible Investment received a higher share of factsheet views in 2018 as did IA Targeted Absolute Return funds, suggesting these vehicles were being used to shield portfolios from the year’s sell-offs.

In keeping with a theme seen for the past couple of years, IA UK All Companies is the peer group that suffered the biggest fall in interest last year. While the sector is still the second most popular on FE Analytics, sentiment towards UK equities has declined significantly since the country voted to leave the European Union and its members are evidently being looked at less often.


Fundsmith Equity, which holds five FE Crowns, is the individual fund that captured the most factsheet views in 2018. The £15.7bn fund has been the most heavily researched product for some time thanks to strong performance by FE Alpha Manager Terry Smith, a low-turnover portfolio and easy-to-understand process.

Square Mile Investment Consulting & Research, which gives the fund an ‘AA’ rating, said: “The philosophy is very straightforward, to invest in higher quality companies and hold them for the long term. Unitholders therefore should not consider this proposition for a short-term foray into global equity markets.

“We would subscribe to the belief that over long term, the types of companies held would tend to outperform and whilst the fund has delivered a stellar set of returns since its launch, there may be periods in time when the fund will lag more cyclically sensitive peers and its benchmark.”

Other funds that were being researched heavily last year include LF Woodford Equity Income, Jupiter EuropeanInvesco High Income (UK) and LF Lindsell Train UK Equity.

 

Source: FE Analytics Market Intel Tool

However, we also looked to see which funds have successfully grown their share of research carried out on FE Analytics, rather than those just with the highest traffic.

Baillie Gifford American, managed by Gary Robinson, Helen Xiong, Tom Slater and Kirsty Gibson, comes out on top when the data is examined this way. The four FE Crown-rated fund has climbed from being the 322nd most researched fund between 2015 and 2017 to be 19th most-popular in 2018.

This comes on the back of a strong run of performance from the £1.8bn fund. For much of 2018, it was the strongest performer from the entire Investment Association universe, thanks to its strong growth bias, but slipped into sixth place by the end of the year.

The FE Invest team, which has the fund on its Approved List, said: “This fund aims to identify exceptional US-listed businesses, focusing on growth potential, culture and edge, and plans to own them long enough so that the benefits of their business models and strength of their cultures become the dominant drivers of their stock prices.”


Despite already being one of the most researched funds on FE Analytics, Fundsmith Equity attracted a higher proportion of factsheet views in 2018 and cemented its place at the top of the table. Last year was another strong one for the fund: its 2.20 per cent total return put it in the top decile of the competitive IA Global sector.

Baillie Gifford Managed, which resides in the IA Mixed Investment 40-85% Shares sector, experienced the third biggest jump in its research share. In all, there are six Baillie Gifford funds in the 50 with the largest increases in popularity, including Baillie Gifford Japanese and Baillie Gifford Emerging Markets Growth.

Seeing the fourth largest uptick in research is CFP SDL UK Buffettology, run by FE Alpha Manager Keith Ashworth-Lord. Using a process based on Warren Buffett and Ben Graham’s ‘business perspective’ investment style, it was one of just three IA UK All Companies funds to avoid making a loss in 2018.

The multi-asset Vanguard LifeStrategy 60% Equity fund had the fifth biggest increase in FE Analytics research last year. Vanguard LifeStrategy 100% EquityVanguard LifeStrategy 80% Equity and Vanguard LifeStrategy 40% Equity are also in the list of the top 50, showing this already popular passive range continues to win fans among investment professionals.

 

Source: FE Analytics Market Intel Tool

Turning to the fund’s that were being researched less frequently by the financial advisers and other investment professionals on FE Analytics, Jupiter European comes at the bottom.

As pointed out in previous articles, the £5.3bn fund still has a very strong track record; it was the IA Europe ex UK sector’s best performing member in 2018, for example, with a 0.34 per cent fall. Its decline in research share last year is down to the fact that it received an extremely high level of factsheet views in 2017.

Standard Life Investments Global Absolute Return Strategies has had quite a significant fall in interest. For a long time it was consistently the most researched fund on FE Analytics, but slipped into fifth place over the 2015-2017 period and into 32nd place in 2018.

Meanwhile, Neil Woodford’s LF Woodford Equity Income fund has seen its share of research fall from 1.323 per cent to 0.9548 per cent. This comes after a bout of poor performance – the fund has made fourth quartile returns for the past three full calendar years.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.