Professional investors spent March researching global bond funds and strategies with a more defensive tilt as equity markets around the world sold off because of coronavirus. 
Stocks in many parts of the globe have been plunged into a bear market in recent weeks after the coronavirus outbreak spread widely and was declared a pandemic.
Huge sections of the global economy are at a virtual standstill as many countries put their populations on lockdown to stem the spread of the virus.
Against this backdrop, we used the FE Analytics Market Intel Tool to find out which funds were being researched more by financial advisers, wealth managers and other FE Analytics users last month.
To determine any change in interest, we looked at all the research that was carried out on the Investment Association universe in March and what share of research each individual fund captured. We then compared this with their research share for the previous 12 months.
Changes in FE Analytics research share by sector – March 2020
Source: FE Analytics Market Intel Tool
The chart above shows how FE Analytics research changed on a sector level during March, with IA Global Bonds being the peer group that attracted more interest than it usually does.
During the market sell-off, the IA Global Bonds sector – which is home to funds that have the bulk of their portfolios in bonds outside of those from the UK or emerging markets – was one of the better performers. Gilts led the way but investors may have been looking for ways to diversify away from this single source of relative security.
Professionals increased their research into IA UK All Companies funds, although this was one of the worst performing areas of the market. Their interest could have been to look for opportunities or simply to see how a large element of their portfolio is holding up in difficult circumstances.
IA Targeted Absolute Return, which is home to funds that aim to protect against market volatility, and IA China/Greater China, which is the country where the virus originated but one of the best performers in the sell-off, were also being researched more heavily.
Source: FE Analytics Market Intel Tool
However, the individual fund that attracted the biggest increase in FE Analytics research last month was not a global bond portfolio but a global equity income strategy: TB Evenlode Global Income.
The fund, which is managed by Ben Peters with Chris Elliott as deputy, was the 398th most researched portfolio on FE Analytics for the 12 months prior to March 2020 but has now jumped into 82nd place.
TB Evenlode Global Income launched in November 2017 and is the global counterpart of the very successful TB Evenlode Income fund, on which Peters is a co-manager alongside equity income veteran Hugh Yarrow.
It takes a similar approach to the UK equity income strategy, in that the managers seek out high-quality, dividend-paying and growing companies.
Square Mile Investment Consulting & Research said: “We hold the team in high regard as reflected through our rating of the Evenlode Income fund, where they have successfully demonstrated that they can launch a fund, raise a significant level of assets and deliver strong long-term returns in line with its objectives.
“This fund is likely to have more of a defensive profile then the broader global equity market. As such, it is likely to offer a level of downside protection in falling markets, but lag when markets are led by lower quality and more cyclically sensitive companies. In addition, this fund is unlikely to have significant direct exposure to emerging market listed companies.
“Overall, we think that this strategy has a promising future and, given the limited track record to base our conviction on, we have awarded the fund our Positive Prospect rating.”
Performance of fund vs sector and index since launch
Source: FE Analytics
Other individual funds that have captured a bigger share of research activity on FE Analytics show how the professionals have been looking for more flexible fixed income strategies.
Mike Riddell and Kacper Brzezniak’s Allianz Strategic Bond fund came in second place and was March’s 135th most researched Investment Association member.
Residing in the IA Sterling Strategic Bond sector, the fund looks different to many of its peers as the managers focus on buying global bonds rather than just those from the UK. It also the aim of maintaining a low correlation to global equities.
The FE Investments team, which has Allianz Strategic Bond on its Approved List, said: “The fund offers a process that should produce a low correlation to equities – lower than most strategic bond funds, including some on our shortlist.
“The equal split between rates, credit, inflation and currency is attractive – most managers are essentially managing credit plus interest rate duration. It was impressive to see the fund make money against the benchmark by betting on long duration – this has been a very unpopular position for bond managers to take in recent years.”
The list also reflects the increased attention on the IA Global Bonds sector, with M&G Global Macro Bond, Vanguard Global Bond Index, GS Global High Yield Portfolio, MFS Meridian US Corporate Bond and Pimco GIS Global Bond being among the sector’s residents that were being researched more heavily in March.
In addition, the fact that funds in IA China/Greater China sector have held up relatively well during the coronavirus sell-off could explain why names such as Allianz All China Equity and HSBC GIF Chinese Equity appear.
Meanwhile, the heavy market falls may have prompted some professionals to look at absolute return funds – with BNY Mellon Global Dynamic Bond and BNY Mellon Real Return being among those looked at. Natixis H2O MultiReturns probably appears because of the very heavy losses it has sustained in the sell-off.