Adviser interest in funds targeting income fell in the first quarter of 2024, while capital accumulation strategies gained momentum, according to Square Mile.
In its latest quarterly Market Intelligence Report, Square Mile said income related fund research accounted for 46.7% of searches conducted via the Academy of Funds, dropping to 40.6% in the fourth quarter and 32% in the first quarter of 2024.
Conversely, this trend was reversed for strategies with the potential of growing capital, which jumped from a 33.3% share of all searches in the third quarter to 46% over the first quarter of 2024.
These figures were well ahead of capital preservation and inflation protection, which scored 14% and 8% respectively.
The Market Intelligence report, which looks at all 377 active, passive and risk targeted funds and investment trusts rated by the company’s analysts, also revealed a significant change in leadership across the most researched fund groups in the first quarter. Boutique fund house Havelock topped the list, followed by First Sentier, Jupiter and Schroders which fell from pole position to fourth place.
In addition, data on research patterns among advisers into closed-ended funds found abrdn UK Smaller Companies Growth Trust was the most viewed, just ahead of Fidelity Special Values. Among fund groups offering risk targeted strategies, Square Mile said there was another shift in adviser behaviour. Liontrust was the most researched asset management company, accounting for 26.8% of searches, followed by HSBC Global Asset Management (14.8%).
There was also a reshuffle at an IA sector level, with IA Global being the most researched sector in the first three months of this year, accounting for 17.6% of all views. This marked a jump from fourth place in the fourth quarter of 2023.
Scott Dakers, business development director at Square Mile, said: “The fact that the IA Global sector was the most researched is perhaps indication of a reluctance among advisers to take regional investment calls and a preference to delegate asset allocation to fund managers with the ability to navigate an increasingly complex global stage.”
Meanwhile, the report showed no change in the ranking of adviser interest in asset classes, with research remaining broadly in line with the previous quarter – equities increased its lead, fixed income remained steady, while multi-asset dropped.
Dakers said: “Many of the economic ‘known unknowns’ continued to loom over sentiment as the first quarter of 2024 rolled out and market commentators have watched each new data set with keen interest. On a political level, the coming months will see several key elections, which may have repercussions on a global scale at a time when geopolitical tensions remain heightened.
“Despite this uncertainty, we believe that when it comes to investment, it is essential to remain fixed on the long-term and our team of fund analysts is focused on identifying those strategies with the greatest potential of consistently delivering on their stated objectives over time.”
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