Professional investors started the new year by spending less time researching funds like Fundsmith Equity and Vanguard LifeStrategy, after a surge in interest during 2019. 
Last year, the financial advisers, wealth managers and other professional investors who use FE Analytics for fund selection seemed to focus the bulk of their efforts on a handful of well-known names.
Active funds such as Fundsmith Equity, LF Lindsell Train UK Equity and Liontrust Special Situations were not only the most heavily researched funds in 2019, but they tended to become more popular as each month went by and grow their share of research activity on FE Analytics.
The same was true of the passive multi-asset funds in Vanguard’s LifeStrategy range, which have been very popular with advisers over recent years.
However, when we compared January 2020 with the previous 12 months, we found that these funds – while remaining some of the most looked-at members of the Investment Association universe – have handed back some of their research share to more off-the-radar strategies.
Fundsmith Equity, for example, remained the most researched fund during the opening month of 2020 but was being viewed at a much lower rate than it was in 2019.
This stands for the other funds highlighted above. Indeed, 23 of 2019’s most heavily viewed funds on FE Analytics saw their share of research decline last month.
Performance of fund vs sector and index under Spencer
Source: FE Analytics
The fund that captured the highest increase in research activity in January 2020 was Franklin UK Mid Cap. While this fund has a very strong long-term track record and achieved another year of outperformance in 2019, the reason for the uptick in research was the announcement that manager Paul Spencer is to retire.
Spencer, who has run the £1.4bn fund since February 2006 and has 33 years of experience in the financial industry, will step down from all portfolio management responsibilities on 30 June 2020. He will retire on 30 September.
Franklin UK Mid Cap – which was the highest returning UK equity fund in 2019 after making a 42.3 per cent total return – will be taken over by Richard Bullas when Spencer steps down. Bullas has worked on the fund as a portfolio manager since 2013.
Trustnet recently asked fund pickers whether the news of Spencer’s retirement should prompt investors to reconsider owning Franklin UK Mid Cap, while another article highlighted several funds that could be held alongside it in a portfolio.
Source: FE Analytics Market Intel Tool
The table above shows the 25 funds that witnessed the largest increases in their FE Analytics research share in January, compared with the previous 12 months.
It’s a mixed bag of funds but there is one trend – most of them have just had a strong year and are ranked in the top quartile of their peer group for 2019. In fact, 18 of the 25 listed above were top-quartile last year.
Most of these funds were relatively overlooked during 2019. The most popular of these last year was Royal London Sustainable Diversified Trust, which was the 62nd most heavily researched Investment Association fund. It climbed into 20th place in January.
Other members of the above list are recent launches but have captured interest in their first few months. FP Foresight Global Real Infrastructure and JOHCM Global Opportunities opened their doors in 2019, for example, while Sanlam Real Assets launched towards the end of 2018.
That’s not to say all of the funds that have been catching the eyes of professional investors at the start of 2020 are among the smallest in the industry.
The largest active strategy on the above table is Fidelity European Dynamic Growth, which has assets under management of £3.3bn and is the fund with the second largest uptick in research.
Managed by Fabio Riccelli, it resides in the IA Europe Including UK sector and was its highest returning member in 2019 after making 31.16 per cent. It’s also in the top quartile over three and five years.
Other funds on the above list with assets of more than £1bn include Liontrust UK Smaller Companies, Royal London Sustainable Diversified Trust, JPM Asia Growth, Vanguard UK Government Bond Index and JPM Emerging Markets.
Source: FE Analytics Market Intel Tool
Flipping things on their head and it should be little surprise to see that LF Equity Income – formerly known as LF Woodford Equity Income – is the fund with the biggest fall in adviser research.
The fund, which was the flagship offering of Neil Woodford, was suspended in the summer of 2019 amid heavy outflows and liquidity problems linked to its holdings in unquoted companies. It is currently being wound down.
As noted, Fundsmith Equity has seen a fall in its share of FE Analytics research activity, although it remains the most viewed member of the Investment Association universe. It had a top-quartile year in 2019 and its fall in research likely reflects a move back towards more ‘normal’ levels of interest after such a strong period.