The number of advisers researching investment strategies with the potential of delivering capital accumulation jumped during the second quarter of 2025.
Square Mile’s quarterly Market Intelligence report found capital accumulation accounted for 42.6% of research carried out via the Square Mile Academy of Funds, overtaking income-related searches which made up 37%.
The report also revealed an uptick in searches for funds which can offer protection from inflation in the second quarter. While still the least researched outcome at 5.6%, it was up from 3.8% in the first quarter and marked the first increase in interest into such strategies, following a steady decline for over a year.
Square Mile said the uncertainty over the impact of Trump’s tariffs and fears that inflation may remain higher for longer than expected seem to be reflected in a renewed focus on funds with the potential of mitigating this risk.
Drilling down to adviser research at asset class level, the report found interest was broadly the same over the quarter, suggesting that advisers are keeping overall asset allocation largely unaltered.
Equities remained the most viewed asset class in the second quarter, accounting for a 55.7% share, followed by fixed income at 21.7%.
Searches for multi-asset strategies picked up slightly at 20.9% while interest in alternatives and property as asset classes remained the lowest at 1.6% and 0.2% respectively.
This pattern was mirrored at IA sector level, with IA Global Equities (18%), IA UK All Companies (10.6%) and IA Sterling Strategic Bond (9%) remaining the three most popular.
Square Mile said its findings also showed a significant change in leadership in searches of funds with a responsible investment mandate. While the most viewed fund over the quarter was the Wellington Global Impact Bond fund accounting for 5.6%, the Liontrust Sustainable Future Managed Growth fund jumped to second from 17th place in the previous quarter, with a 3.5% share. The Baillie Gifford Positive Change fund rose to third from 15th place over the quarter at 3.4% of all views.
Among passive strategies, Aberdeen Investments saw two of their funds make the top three most viewed. Their Short Dated Global Inflation-Linked Bond Tracker and Asia Pacific ex-Japan Equity Tracker sat in first and third place respectively.
John Lester, senior business development director at Square Mile, said: “Uncertainty continues to dog markets. Trump’s tariffs, announced with great fanfare at the very beginning of the last quarter, unsettled investor sentiment and led to fears of a resurgence of inflation, a slowdown in global growth and a trade war with China.
“At the same time, the Russia and Ukraine conflict continues, while in the UK a shift in fiscal policy seems inevitable if the Treasury has any chance of balancing the books when meeting its new spending commitments.”
Lester said that against this backdrop, it is “understandable” that research into both asset classes and IA sectors remained largely unaltered over the last quarter, potentially a sign that advisers are delaying any major shifts in portfolio exposures until there is greater clarity over where the winners and losers will lie.
“The IA Global, IA UK All Companies and IA Sterling Strategic Bond sectors, which continue to be the three most researched, afford fund managers flexibility over where they can hunt for returns, suggesting a preference to delegate asset allocation decisions to skilled managers who are able to navigate testing markets,” he added.
Main image: alexander-grey-W7cPLHOa0eQ-unsplash
