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MI Report: Q2 2023

13 Jul, 2023 | Return|



As has been the case for some time now, markets remained fixated on inflation and its impact on interest rates in the second quarter of 2023. There is still a risk of stickier inflation and rising wages causing continued market volatility. Recession concerns also persist, with the Eurozone in a small technical recession and UK GDP slightly rising in Q1. However, while some cracks are appearing in the US economy, strong consumer spending and a robust labour market indicate no immediate recession there.

Against this backdrop, we find ourselves venturing into uncharted waters, with central banks prioritising containing inflation over supporting economic growth or asset prices. Searches for funds targeting inflation protection subsequently fell to 3.8% of views, compared to 7.5% in Q1. Capital accumulation fund searches made up over half of all searches with 50.9% of all views and income queries were also a large proportion of searches at 35.8%.

Despite volatility in the markets, views per asset class largely stayed the same this quarter. Fixed income funds, which had increased in popularity in Q1, stayed the same at 26.3% in Q2. Equity views remain the most popular by far with 52.7% of all searches, up from 50.7%. Alternatives also increased in popularity, going from 0.7% to 2.0%, whilst multi-asset views decreased to 18.7% from 22.0%.

The IA Sterling Strategic Bond and IA UK All Companies were level pegging as the most popular sectors, accounting for 11.9% and 10.6% of all searches.

With respect to our fund dashboard, Opinion remained a primary access point, but increased in proportional terms from 32.9% to 47.7% in Q1 and Q2, respectively. Performance also increased its views, going from 21.4% to 24.4%. Interestingly, ESG views saw a big downturn from 30% to 16.3% this quarter perhaps reflecting a broader cooling in investor appetite for funds with a responsible investment mandate.

In terms of views per management group, Baillie Gifford climbed to the top spot with 5.7% of searches. Jupiter Asset Management, last quarter’s top spot holder, and First Sentier came in at second and third.

Waverton Sterling Bond fund was the most viewed active fund over the quarter with 2.3% of views. It was closely followed by four funds, all attracting 2.2% of views. They were the Aegon Diversified Monthly Income, Aberdeen Liquidity, BNY Mellon Long-Term and River and Mercantile UK Recovery funds.

For Responsible Rated funds, the Wellington Global Impact Bond fund remained the leader of pack with 8.6% of views.

On the passive investing side, Vanguard continued to hold the top spot with 31.9% of views - so a little down on last quarter. Again, they were followed by Blackrock and Legal & General Investment Managers with 15.8% and 14.5% respectively.

Finally, as with last quarter, Liontrust was the most searched risk-targeted management group. They accounted for 22.8% of all searches. Aviva Investors came in second, with a 4.7% increase in views from last quarter, to 13.8%.

For a quick snapshot of the findings from Square Mile's Q2 2023 Market Intelligence Report, download the summary reportIf you would like more information, get in touch.



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