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MI Report: Q3 2023

12 Oct, 2023 | Return|

Screenshot2023-01-11...

The backdrop

With a much anticipated recession yet to materialise, economic growth has, in fact, been broadly positive across the board this quarter - with Germany and Italy being notable exceptions. That being said, any growth outside of the US has been modest. However, after an extended period of sharp rises, we believe that the monetary tightening phase in the US and Europe is coming to an end, though the risk that inflation may stay higher for longer remains.

The key take-aways from our Q3 report

Against 2023’s persistently higher inflationary environment, inflation protection searches increased from 3.8% to 6.7% in Q3. However, income fund views attracted the most searches by far this quarter, seeing its searches go up to 46.7% from 35.8% in Q2. There was a large drop in searches for capital accumulation funds, which attracted 33.3% of views compared to 50.9% last quarter. Capital preservation fund searches also saw a small increase from 9.4% to 13.3%.

Despite the unpredictable economic backdrop, as with last quarter, views per asset class were broadly stable in Q3. The largest change was within multi-asset searches which increased from 18.7% to 19.8%. Property searches were essentially flat as were equity views. Small decreases were seen in alternative fund views and fixed income fund searches. They went from 2.1% to 1.2%, and 26.3% to 25.9% respectively.

Another similarity to last quarter was the most popular sector search. IA Sterling Strategic Bond was top, as in Q2. However, the IA Targeted Absolute Return sector was ever so slightly more popular than the IA UK All Companies, which was second last quarter. The IA Sterling Strategic Bond garnered 10.7% of views (down from 11.9% in Q2), with the IA Targeted Absolute Return attracting 10.6% of searches - up from 9.1% last quarter.

Turning to our fund dashboard access points, Performance became the primary access point in Q3. It attracted 36.2% of views, with Opinion decreasing to 19.0% from 47.7% in Q2. Risk was the same as Opinion at 19.0%, with ESG and Costs attracting 17.2% and 8.6% respectively.

For this quarter, there was little change in leadership among active asset managers with Baillie Gifford leading with a 4.7% share, followed by First Sentier Investors (4.5%) and Jupiter Asset Management (4.4%).

It was all change in terms of most viewed active funds over Q3. The Matthews Asia Pacific Tiger and Ruffer Diversified Return funds came in joint first with 2.7% of views. They were closely followed by the Havelock Global Select fund with 2.4% of views.

While it saw a fall in searches, the Wellington Global Impact Bond fund stayed the most viewed Responsible Rated fund with 7.4% of all searches.

Turning to groups which offer passive strategies, Vanguard held on to the top spot again this quarter with 26.1% of views. Legal & General was second with 21.1%, an increase of 6.7%, and abrdn came in third with 15.1% of views - increasing their views by 2%.

Finally, in terms of views per risk-targeted management group, Liontrust came out top with 24.4% of views. It was followed by LGIM and Aviva with 14.4% and 14.2% respectively. LGIM’s views increased by 3.2% this quarter - the biggest change amongst the top 10 risk-targeted management groups.

For a quick snapshot of the findings from Square Mile's Q3 2023 Market Intelligence Report, download the summary reportIf you would like more information, get in touch.

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