A passive property fund benefited from the biggest inflow of 2020, although mixed investment strategies – including several of the popular Vanguard LifeStrategy funds – were among those taking in the most investor money last year, according to data from FE Analytics.
Investors faced one of the sharpest market contractions in recent memory as the Covid-19 pandemic took hold in early 2020. This was followed by a fiscal and monetary stimulus-fuelled rally that saw markets recover most of their losses.
As such, Trustnet found out which funds had taken the most in inflows across 2020 using FE Analytics’ Market Movements tool.
With a £2.3bn inflow, the iShares Global Property Securities Index unit trust attracted the most new money of any fund last year.
Source: FE Analytics
The fund tracks the performance of the FTSE EPRA/NAREIT Developed index – a global index of property and property-related stocks including real estate investment trusts. Much of its inflows came in the latter half of last year (see table below). At the end of the year it had assets of almost £5bn.
However, multi-asset strategies proved to be most popular last year and took many of the spots in the 25 funds attracting the most inflows.
These funds were led by Vanguard LifeStrategy 60% Equity, which has now grown to £10.3bn in size (as at end-December 2020), up from £7.6bn a year earlier.
The Vanguard LifeStrategy range – a line of passive funds of funds built from underlying Vanguard index trackers – is popular with advisers as a core holding.
Vanguard LifeStrategy 60% Equity was joined by Vanguard LifeStrategy 40% Equity and Vanguard LifeStrategy 80% Equity, which each had inflows of more than £1bn.
Other popular multi-asset strategies included JP Morgan Asset Management’s actively managed JPM Multi-Asset Moderate and JPM Multi-Asset Cautious funds, overseen by Jonathan Cummings and Nick Malangone.
Baillie Gifford Managed and two strategies run by FE fundinfo Alpha Manager Mike Fox – Royal London Sustainable Diversified Trust and Royal London Sustainable World Trust – were among actively managed funds that also captured significant inflows.
Baillie Gifford’s growth-focused approach to investing remained popular with investors with five of its offering among the top 25 including last year’s best-performing fund Baillie Gifford American. It was joined by others including Baillie Gifford Positive Change, Baillie Gifford European and Baillie Gifford Pacific.
One of the most popular funds of the first half of the year – Allianz Strategic Bond – continued to attract money during the second half, taking a total of £1.5bn during 2020. Mike Riddell and Kacper Brzezniak's strategic bond fund, which invests in sterling-denominated bonds from across the global corporate and government bond markets, was one of the best performing funds during the intitial coronavirus sell-off.
Source: FE Analytics
Terry Smith’s giant global equity strategy – Fundsmith Equity – also recorded inflows during 2020, although most came in the latter half of the year.
The fund had £901m in inflows during 2020, growing to £23.2bn after £836.8m was invested during the last six months of the year.
Another fund seeing strong inflows in the year's second half was Baillie Gifford Positive Change, whose strong performance and ESG (environmental, social & governance) focus continued to win more investors with inflows of £938.3m in the last six months of 2020.
Others that featured among the top-25 strategies thanks to strong inflows during the second half include the L&G Global Developed Four Factor Index fund. Over 2020 it took in around £1.7bn – including £1.2bn in the second half – to stand at £3.7bn by the end of the year.
The strategy, managed by Tasos Kontos and Tom Hammond, tracks the performance of the SciBeta Developed High-Factor-Intensity Multi-Beta index, constructed based on four risk factors: value, low volatility, momentum, and quality.