Square Mile’s quarterly MI Report captures the viewing patterns among users of our Academy of Funds, which provides insights and data on all funds rated by the company’s 20-strong team of analysts. Below are some of the trends we saw after over the first quarter of 2021.
During Q1 2021, broad global equity indices rose mid-single digits in percentage terms, led strongly by US markets. In the Far East, the performance of equity markets was less impressive. After a strong start to the quarter, several of them conceded the ground they had made in 2020. In the UK, domestic stock markets had a disappointing January but started to recover in line with the other European stock markets as the quarter progressed. In the bond markets there were spikes in government global yields, which started to rise in early February as concerns about inflation returned. This resulted in some central banks becoming more hawkish in their response to negative interest rates.
The analytics from across the Academy of Funds highlights a resurgence in interest of targeted absolute return strategies, with an 13.6% increase in views of this sector from Q4 2020, placing it in top spot. This puts the sector on an equal footing with the IA UK All Companies sector, which accounted for 18.3% of all searches, compared to 18.8% for the IA Targeted Absolute Return sector. Both were considerably ahead of IA Global, which came in at third place with 8.9% of all views.
With this backdrop, it is interesting to note that the most viewed funds in the Academy of funds were the BNY Mellon Real Return fund, the R&M UK Recovery fund and the Schroder Sterling Corporate Bond fund. As you cast your eye down the list of most viewed active funds, obvious trends are hard to identify. There does appear however, to have been increasing interest for some fixed income strategies and a number of the UK special situations/recovery strategies.
This is borne out in part by the change in views by asset class from Q4 where equity dropped from 50.8% to 46.6% and multi asset increased from 31% to 33%, while fixed income increased from 18% to 19.9%. In terms of searches per outcome, Capital Accumulation remains the most sought-after, growing significantly from 47.6% to 59.8%, while Income dropped sharply from 25.8% down to 13.4%. Capital Preservation and Inflation Protection only moved a couple of percentage points each overall.
Looking at the funds with responsible ratings, the most viewed fund over the quarter was once again a BNY Mellon Fund - BNY Mellon Sustainable Global Dynamic Bond fund. This was followed by the Royal London Sustainable World Trust and the ever-popular Baillie Gifford Positive Change fund.
This meant that BNY Mellon Fund Managers was the most viewed fund group over the quarter. Recent corporate activity going on within the business during this time may have also been a contributing factor. Schroders UT Managers and River and Mercantile Asset Management were two and three respectively.
Looking at the risk targeted funds in the Academy, Aberdeen Standard Investments maintained its strong grip on the top viewed funds with over half of those viewed being managed by them. Legal and General and HSBC were in second and third position. Turning to the passive funds in the Academy, a similar story played out where Vanguard maintained its top position with 45% of the views.
Turning to the Fund Dashboard, the most clicked on pillar remains the Opinion pillar with 33% of initial clicks entering via that option, followed again by ESG which was just under 30%. Performance at 15.9%, Risks at 11% and Costs at 10.3% make up the remainder.
For a quick snapshot of the findings from Square Mile's Q1 2021 Market Intelligence Report, download the summary report. If you would like more information, please get in touch.