A potential market correction has led to advisers seeking out funds with the potential of preserving capital, says Titan Square Mile.
The firm’s latest Market Intelligence Report shows that funds with the potential of preserving capital saw the largest shift in adviser interest in the third quarter, accounting for over one in five searches (21.4%), up 6.6 percentage points on the previous quarter.
Meanwhile, interest in capital accumulation and income strategies remained broadly level at 42.9% and 35.7% respectively.
In contrast, inflation protection accounted for fewer than one percent of searches in the third quarter, down from 5.6% the previous quarter, despite concerns over persistent levels of inflation in the UK economy.
Titan Square Mile’s quarterly report provides a detailed account of viewing patterns among advisers using the Academy of Funds, a depository of insight on 399 active, passive and risk targeted funds and investment trusts rated by the company’s team of analysts.
It found that the IA Global sector accounted for the most searches during the third quarter at 19%, almost double the second most popular search, IA Sterling Strategic Bond (10%). IA UK All Companies came third at 8.7%.
There was also a major reordering of adviser interest among funds with responsible mandates below the Wellington Global Impact Bond fund which maintained its position as the most popular. The Edentree Short Dated Bond fund rose from fifth to second place with a 3.9% share of views, while the FSSA Asia Focus fund surged from 18th place in the second quarter to share third place with the Royal London Sustainable World Trust in the third quarter.
Additionally, the report highlighted a notable change in leadership among fund groups offering risk targeted solutions. Rathbones and Liontrust remained in second and third place respectively, however, Legal & General Investment Management registered a 12.4 percentage point increase in their share of views to 22.9%, lifting it from fifth place in the second quarter to pole position over the last quarter.
John Lester, senior business development director at Titan Wealth, said: “The IMF has warned that the UK faces the highest levels of inflation among its G7 peer group over the remainder of 2025 and into the new year. However, our latest Market Intelligence Report paints a different picture of what might be front of mind among advisers.
“The fact that research into inflation protection as an investment outcome in Q3 was negligible while capital preservation registered a marked increase suggests a shift towards greater caution as alarm bells continue to ring over a potential market correction driven by a sell-off in AI related companies.
“However, with capital accumulation strategies continuing to dominate adviser research, adviser outlook appears to remain relatively sanguine overall, despite an uptick in interest in protecting capital.”
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