The Macro Backdrop
After two years of exceptionalism, US stocks finally fell in Q1. Notable declines were seen in both IT and consumer discretionary sectors. Talk of trade tariffs started to emerge too, which also began to act as a drag on performance. US Treasuries outperformed, however, due to the release of weaker economic data, such as a cut to economic growth and a rise in projected inflation.
In contrast, European names started to outperform - in part due to defence and infrastructure spending plans announced by Germany but also due to inflows from rotations out of US names. Over the English Channel, larger UK equity names enjoyed a good quarter. But, questions over the general health of the UK economy impacted the performance of small and mid-sized companies.
Key Takeaways
Views by Investment Outcome
Capital accumulation lost its top spot this quarter with searches by income coming in first, with 42.3% of views. Capital accumulation dropped to 38.5%, down from 39.6% of searches at the end of 2024. Capital preservation came in third with 15.4% of all views, which was down slightly from 18.8% last quarter. Inflation protection searches continued its downward trend, dropping to 3.8% from 4.2%.
Views by asset class
For views by asset class, equity searches were once again top. This quarter, the search achieved 58.1% of views, whereas last quarter it was 59.4%. Second place, up from third, was fixed income with 22.7% of searches, up from 18.2% at the end of 2024. Multi-asset searches dropped to third place once again with 17.8% of views, while alternatives remained in fourth with 1.2%. Interestingly, property views remerged, however, the asset class only attracted 0.1% of all searches.
Views by sector
As with last quarter, IA Global topped the leaderboard for views by sector. However, its share of all views dropped from 20.9% to 15.7%. Coming in second again was IA UK All companies, which also experienced a drop, but only from 10% of searches to 9.3%. In third place was IA Sterling Strategic Bond with 8.7% of views, which was a slight increase from 7.9% in Q4 2024. Dropping to fourth place this quarter was IA Mixed Investment 20-60% Shares, which saw a decrease in views from 8.6% to 5.8%.
Top views by fund house
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Havelock (6.8%)
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Schroders Investment Management (4.6%)
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Jupiter Asset Management (3.9%)
Top views by fund
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Havelock Global Select Fund (9.2%)
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Amati UK Listed Smaller Companies (2.3%)
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Redwheel Global Emerging Markets (1.3%)
Responsible Investing
There was a new entry in the top three most viewed responsible funds this quarter. Vontobel’s TwentyFour Sustainable Short Term Bond Income fund came in first, with 10% of all views. Last quarter’s joint first-place holder, Wellington's Global Impact Bond fund, was second with 3.2%. While Royal London Sustainable World Trust, last quarter’s other first-place holder, was a close third with 3.0%.
Passive investing
This quarter, Fidelity’s Index US fund came in first for passive strategy searches, up from second last quarter, with 3.6% of views. Coming in second was Legal & General All Stocks Gilt Index, which was third in Q4 2024. This quarter, it attracted 3.3% of all searches. For Q1’s third spot, Vanguard Global Bond Index garnered a 2.9% share of views.
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