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Raking it in: the ten most popular funds this year

Laura Dew
Written By:
Laura Dew
Posted:
Updated:
20/09/2013

The investment story of 2013 so far has been one of soaring developed world equity markets but slumping bond returns. But where exactly did investors put their money?

A look at recent IMA statistics shows a broadly similar pattern, with equity flows hitting multi-year highs and bond funds starting to see outflows.

For the country’s most successful funds, however, it is more a case of business as usual: many of the most popular funds this year would have featured in a list of 2012’s favourite portfolios.

On a regional basis, UK equities may have enjoyed an uptick in interest this year, but in general it is very much the global, go-anywhere portfolios that are the most popular year-to-date.

However, despite the success of the funds below, the polarisation of industry flows looks increasingly stark, according to estimated fund flow data from Morningstar.

The UK-domiciled fund universe has taken in a net £11.1bn in flows year-to-date, but the average fund has taken in just £5m.

Below are the ten most successful UK-domiciled funds so far this year in terms of estimated net inflows.

The top ten

10. L&G US Index Trust
The only index fund on the list, the fund saw inflows of £593m as investors went passive in an effort to make the most of the US equity rally. With the S&P 500 up 21% year-to-date, that decision has been amply rewarded so far.

9. First State Global Emerging Markets Leaders
Co-managed by Jonathan Asante and Tom Prew at First State Stewart, the £4.4bn fund has enjoyed estimated inflows of £734m this year. Emerging markets have been out of favour this summer but that period represented investors’ last chance to access the fund on favourable terms: First State has now soft-closed the portfolio by implementing a 4% initial charge for new investors.

8. Newton Real Return
Newton’s assets under management has benefited from continued inflows into Iain Stewart’s absolute return vehicle, which has taken in an estimated £819m in net new money this year. The fund’s performance has dipped relative to peers over the short-term but remains one of the top Targeted Absolute Return performers on a five-year view.

7. Newton Asian Income
Jason Pidcock’s fund has been a firm favourite with buyers looking to diversify their equity income exposure in recent years. The fund has also delivered strong capital growth, ranking first in the IMA Asia ex Japan sector over a three year period, with a 41.3% return against a sector average of 13.3%. Inflows have reached £850m this year to bring total assets to £3.9bn.

6. Cazenove UK Opportunities
A flagship Cazenove offering sitting in the UK All Companies sector, this is the oldest fund in the list. Launched in 1989 and now managed by Julie Dean, the fund – now part of the Schroders stable following its acquisition of Cazenove – has see inflows of £875m to bring total assets to £2.1bn. Dean also now runs the popular Schroders UK Growth trust, formerly run by Richard Buxton.

Over the page: The five most popular funds of the year so far

5. M&G Global Macro Bond fund
The third M&G fund on the list, Jim Leaviss and Mike Riddell’s ‘go anywhere’ bond fund has seen inflows of £966m swell assets to a total of £1.2bn. Jupiter’s Merlin team is among those to have bought the fund over that period.

4. Bailie Gifford Diversified Growth fund
Managed by Patrick Edwardson and Mike Brooks, the multi-asset fund was soft-closed in March when assets reached £3bn but they have continued to swell since then. The vehicle, which invests across asset classes from equities to commodities to infrastructure, has taken £1.3bn this year to bring assets to £4.2bn.

3. M&G Global Dividend fund
Managed by Stuart Rhodes, the fund has seen inflows of £2.3bn to bring its total to £7.3bn. It is now the biggest fund in the Global sector.

2. Standard Life Investments’ GARS
The country’s biggest fund at £18bn in size, GARS’ soaring inflows have continued this year despite some recent headwinds for the fund. It has taken in £3.3bn year-to-date despite the departure of three managers to Invesco Perpetual at the start of 2013.

1. M&G Optimal Income fund
Richard Woolnough’s strategic bond fund has seen inflows of over £4.3bn so far this year, according to Morningstar, bringing total assets to almost £16bn. With M&G having stemmed flows into Woolnough’s Corporate Bond and Strategic Corporate Bond funds, Optimal Income is now the easiest way to gain exposure to the manager’s abilities.