The macro backdrop
The big news for the third quarter of 2024 was that both the Federal Reserve and the Bank of England cut their interest rates. In August, the BOE reduced the rate to 5%, down from 5.25%. Over in the U.S., the Fed made a bigger cut of 0.5% to lower its target rate to between 4.75% and 5%. Both central banks made the decision based on economic data that pointed to a slowing economy.
However, despite much-anticipated rate cuts finally starting, uncertainty remains. Economic data released since the cuts has been stronger. So, while there is still anticipation of further reductions to come, the pace of those cuts is tricky to predict. For many, though, the news of a rate reduction was at least promising—especially for bondholders, given the rollercoaster ride of the last two years for fixed-income investors.
Key takeaways from our Q3 report:
Views by investment outcome
This quarter’s most popular search outcome was capital accumulation - returning to its top spot with 45.9% of views, up from 38.5%. The second most popular search was income, with 42.6% of views. Capital preservation attracted 6.6% of views, down from 9.6% in Q2, while inflation protection went down too, to 4.9%.
Views by asset class
Equity searches were top of the leaderboard. However, the portion of searches it received was lower, down from 62% to 56.6% this quarter. Fixed income was second again, with a similar percentage of searches to last quarter. It attracted 25.6% this quarter, compared to 24.7% in Q2 2024. Multi-asset searches saw an increase to 17.3% of searches, whereas it attracted 12.8% of views previously. Alternatives decreased ever so slightly to 0.4% from 0.5%.
Views by sector
IA Global retained its top spot this quarter, with 19.9% of views. Next up was IA UK All Companies, with a 9.7% share of views, while joint third place went to IA Targeted Absolute Return and IA Flexible Investment, which attracted 8.0% of all searches. Behind them were IA Europe Excluding UK and IA Sterling Strategic Bond. IA Europe Excluding UK attracted 6.8% of views, and IA Sterling Strategic Bond attracted 5.5%
Top views by fund house
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Havelock (10.6%)
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Premier Miton (6.4)
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M&G Investments (6.0%)
Top views by fund
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Havelock Global Select Fund (14,5%)
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Premier Miton Diversified Dynamic Growth Fund (6.6%)
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Janus Henderson Absolute Return Fund (5.0%)
Responsible investing
It was all change again at the top - as it was in Q2. First, M&G Positive Impact was ranked first with 12.1% of views. Joint second place went to BlueBay Impact-Aligned Bond and CT UK Social Bond with 9.7% of the quarter’s searches. Next, it was abrdn Global Corporate Bond with 9.2% of searches. All of these funds saw a large increase in searches compared to the previous quarter.
Passive investing
Finally, coming in first, this quarter, was Vanguard Global Corporate Bond, with a massive 43.7% of views. The second spot in Q3 went to Legal & General All Stocks Gilt Index - a previous top spot holder. Coming in third was Fidelity Index US Fund with 4.2%, again a previous top spot holder.
For a quick snapshot of the findings from the Square Mile Q3 2024 Academy of Finds report, download the summary report here >
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