Notable funds such as Standard Life Investments Global Absolute Return Strategies, CF Woodford Equity Income and Jupiter Merlin Income Portfolio appear to be the subject of less research by professional investors in 2017, analysis by FE Trustnet suggests.
An article yesterday revealed that funds such as Old Mutual UK Dynamic Equity, Vanguard LifeStrategy 60% Equity and Invesco Perpetual Asian seem to be capturing more investor attention this year.
We determined this by looking at the share of total factsheet views on FE Analytics that each Investment Association fund captured in 2016 and the first eight months of 2017, then working out which had managed to increase their share the most between the two periods.
For this article, we have turned things on their head and looked at the funds from the Investment Association universe that have witnessed a decline in their share of factsheet traffic between last year and the first eight months of 2017.
Performance of fund vs sector over 2yrs
Source: FE Analytics
At the top of the list is Standard Life Investments Global Absolute Return Strategies, which has seen a 0.002822 percentage point fall in its share of factsheet research.
That number might seem very small, but is down to the sheer number of funds being researched – 3,687 from the sample looked at for this article – and represents a big change in reality. It’s important to note that the fund is still very much on investors’ radars – over 2017, it was the 12th most viewed factsheet on FE Analytics, although this was down from fourth place in 2016.
The £23.3bn fund has endured a tough time in recent years. The chart above shows how it has posted a loss of 1.21 per cent over the past two years, at a time when its average peer in the IA Targeted Absolute Return sector has generated a 4.83 per cent total return.
FE Trustnet recently asked a selection of analysts whether investors were right to have sold the fund – commonly known as GARS – at the start of the year, with some coming out in favour of the behemoth fund and others being more cautious.
The table below shows the 25 Investment Association funds that have seen the biggest declines in the factsheet research in 2017 to date compared with 2016, along with their ranking to show how popular they are now.
Some of those on the list remain among the most researched products on FE Analytics but have seen their share of research decline since last year. This suggests professional investors have started to look at a wider range of funds in their research.
Source: FE Analytics Market Intel tool
CF Woodford Equity Income, which is headed up by the FE Alpha Manager Neil Woodford, was the second most viewed factsheet in 2016 and has held onto this position in 2017 so far. However, it is now capturing a smaller share of the overall factsheet research, declining by 0.001198 percentage points.
This comes as the fund undergoes a period of underperformance, having witnessed a number of stock blow-ups in recent weeks including Provident Financial, Allied Minds, AstraZeneca and AA.
As a result, the £9.3bn CF Woodford Equity Income fund is the worst performing fund in the IA UK Equity Income fund over one year to 29 August 2017, as well as over three and six months. It has also dropped into the peer group’s sector quartile since launch, having being the best performer for the bulk of its track record.
Woodford Investment Management’s Mitchell Fraser-Jones recently touched on the fund’s underperformance in an update: “Our long-term approach to investment management is encapsulated in a patient capital investment style. We look beyond market volatility and focus on the long-term fundamentals of businesses.
“Neil’s underlying investment philosophy and strategy are underpinned by the analysis of the fundamentals of the macroeconomy and the individual companies in his investment universe. His investment anchor is to always focus on valuation.”
Performance of fund vs sector over 1yr
Source: FE Analytics
There are a number of high-profile names on the list.
Invesco Perpetual High Income has a degree of overlap with CF Woodford Equity Income as they take similar approaches and manager Mark Barnett worked closely with Woodford for a number of years at Invesco Perpetual. This £10.9bn fund is in the IA UK All Companies sector’s bottom decile over one year, as well as over three and six months.
Jupiter Merlin Income Portfolio, which is run by FE Alpha Managers John Chatfeild-Roberts and Algy Smith-Maxwell along with Amanda Sillars and David Lewis, is one of the most popular multi-manager offerings in the UK but has seen its factsheet views ranking drop from 21 last year to 35 over 2017 to date.
The £3bn fund is another going through a period of lacklustre returns, sitting in the IA Mixed Investment 20-60% Shares sector’s third quartile over one year and fourth quartile over three and five.
Other high-profile funds to see a decline in their factsheet traffic from professional investors include AXA Framlington UK Select Opportunities, Invesco Perpetual Distribution, M&G Recovery, BlackRock Gold & General and Standard Life Investments UK Equity Income Unconstrained.