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Academy of Funds analytics: Q2 2024

26 Jul, 2024 | Return|

Screenshot2023-01-11...

 

The macro backdrop

In the second quarter of 2024, inflation and interest rates remained key concerns, but a notable shift occurred as the European Central Bank became the first to lower its base rate by a quarter of a percent. Many believe that other central banks, including the Bank of England, are likely to follow later this year with cuts of their own.

However, both inflation and interest rates will probably still remain higher than we saw before the pandemic. Despite this, global economic growth is expected to be robust, so equities should continue to deliver good returns. For bonds, a ‘higher-for-longer’ interest rate environment, may mean the majority of returns will come from healthier coupons rather than capital gains.

 

Key takeaways from our Q2 report

 

Views by investment outcome

In the first quarter of 2024, income was the most popular searched outcome, with 44.2% of views. Last quarter’s most popular searched outcome, capital accumulation came in second with 38.5%, down from 46% of all views. Capital preservation searches attracted 9.6% of views, which was down from last quarter, while inflation protection also fell to 7.7%.

 

Views by asset class

Equity searches came in top yet again. In fact, its percentage of searches increased from 60% to 62% compared to Q1 2024. As with last quarter, fixed income searches were the second most popular with 24.7% of views, decreasing slightly from 25%. Multi-asset searches decreased again this quarter too, attracting 12.8% of views, having seen 14.2% of the searches in Q1. Alternatives decreased slightly to 0.5% having gained 0.8% of the views last quarter.

 

Views by sector

Looking at sectoral views, IA Global remained in first place, with 22.1% of views in Q2 2024. In second place, IA Global Equity Income saw 13.8% of searches, while IA UK All Companies dropped to third, with 8.7% of views. Behind them were IA North America with 7.2%, while IA Sterling Strategic Bond came in fifth - having been in third place last quarter, and second place at the end of 2023.

 

Top views by fund house

  1. Havelock (10%)

  2. Schroders (9.7%)

  3. T. Rowe Price (8.5%)

 

Top views by fund

  1. Havelock Global Select Fund (15.8%)

  2. Principal Global Investors Fund (7.6%)

  3. Guinness Global Equity Income Fund (6.9%)

 

Responsible investing

Elsewhere, for responsible-rated funds, it was all change at the top, with T. Rowe Price’s Global Impact Credit Fund becoming the most popular fund with 21.3% of views. In second place was the Schroder Global Cities Real Estate fund with 17.2% of views. In third place was the Wellington Global Impact fund with 13.9%. All three funds saw large jumps in their views relative to last quarter.

 

Passive investing

Finally, when it came to passive strategy searches in Q2, Fidelity’s Index US fund moved up the board from third to first, with 5.5% of searches. Interestingly, it actually attracted a larger proportion last quarter, with 6.1% of views. The second spot in Q2 was last quarter’s top spot holder, Legal & General All Stocks Gilt Index, with Vanguard Global Bond Index just behind it in third. They attracted 4.3% and 4.0% of views, respectively.

For a quick snapshot of the findings from the Square Miles Q2 2024 Academy of Finds report, download the summary report here >

 

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