Man GLG UK Income, Baillie Gifford Japanese and Premier Multi-Asset Distribution are some of the Investment Association funds that professional investors have been researching more heavily at the start of 2018. 
The new year has gotten off to a more challenging start than might have been expected. Following a decent bull run in the opening weeks of 2018, markets took a sharp dive from the 26 January onwards after investors became spooked by the idea of higher inflation and faster-than-anticipated interest rate rises.
The FE Analytics Market Intel Tool – which allows us to examine the research activity of the financial advisers, wealth managers and other professional investors using FE Analytics – shows that there were also some changes in the funds being followed over this time.
Source: FE Analytics Market Intel Tool
The most popular funds overall have seen little change in January 2018, aside from the exact order of popularity. For example, the five most heavily researched funds of 2017 were Jupiter European, Fundsmith Equity, LF Woodford Equity Income, Stewart Investors Asia Pacific Leaders and Invesco Perpetual High Income; in January all of these funds were in the top five, only in a different order.
However, as mentioned in previous articles, the funds in this list rarely change – owing to their size and the fact that they are present in a lot of client portfolios. What can be more insightful is to look at which funds attracted a greater share of FE Analytics research activity in January 2018 than they posted in 2017.
When examined this way, the data shows that GS Global CORE Equity Portfolio witnessed the biggest increase in professional investor attention in the opening month of the new year.
The $4.6bn fund is managed by Goldman Sachs Asset Management’s quantitative strategy team and is designed to offer core global equity exposure through a portfolio that has the same style, sector, risk and capitalisation characteristics as its MSCI World benchmark; outperformance is aimed for through underlying stock and country selection.
The fund, which holds four FE Crowns, was highlighted in a recent FE Trustnet article for its strong performance on a wide range of risk and return metrics over the past five years. Indeed, the fund came in second place in this research on the IA Global sector with only FE Alpha Manager Terry Smith’s highly respected Fundsmith Equity fund achieving a better score.
GS Global CORE Equity Portfolio has also won fans among investment analysts, with the FE Invest team putting in on its Approved List of preferred funds. The fund is in the peer group’s top decile for five-year total returns to the end of 2017, alpha, maximum drawdown, Sharpe ratio and downside capture.
“The fund offers a very distinctive approach to global equities, due to the use of quantitative techniques. The offering is even more compelling with its use of non-traditional sets of data. This is the only fund we have met offering exposure to machine-learning techniques, using images provided by satellite and so on,” FE Invest analysts said.
“Active investors might get disappointed with the low tracking error and limited industry or stock specific risks. Nevertheless, it allows investors to get a core exposure to global equities, with the potential for consistent excess gaining over the investment period.”
Source: FE Analytics Market Intel Tool
As the table above demonstrates, the increase in research activity has not been restricted to any Investment Association peer groups in general – although an international theme seems to be very much in play.
Baillie Gifford Japanese sits in second place, reflecting the increase in interest towards the Japanese market that has come on the back of relatively attractive valuations, continued loose monetary policy and prime minister Shinzo Abe’s ambitious stimulus package.
The £2.5bn fund, which holds five FE Crowns, is the IA Japan sector’s third best performer over 10 years after posting a 235.80 per cent total return, compared with 125.31 per cent from its average peer and 126.97 per cent from the Topix. It is also ahead of its average peer and the benchmark over one-, three- and five-year timeframes.
Longstanding manager Sarah Whitley is set to retire later in the year, handing over the reins to current co-manager Matthew Brett. Analysts are relatively relaxed about the move, noting that Baillie Gifford Japanese will continue to be run using a long-term and team-based approach after Whitley’s departure; furthermore, Brett has worked on the portfolio for close to 10 years.
Although investors have tended to move away from UK assets since the country voted to leave the EU, a handful of UK equity funds did gain a greater share of professional investor attention in January than they did in 2017.
In the top 50 we have offerings such as Keith Ashworth-Lord’s CFP SDL UK Buffettology, Henry Dixon’s Man GLG UK Income, James Lowen and Clive Beagles’ JOHCM UK Equity Income and James Zimmerman’s Jupiter UK Smaller Companies funds. The Buffettology, Man GLG and Jupiter funds hold five FE Crowns while Ashworth-Lord and Dixon have FE Alpha Manager status.
The multi-asset sectors are also well-represented on the list with names such as the team-managed Premier Multi-Asset Distribution, Nick Mustoe’s Invesco Perpetual Managed Income and Bambos Hambi’s Standard Life Investments MyFolio Managed III funds winning more research share.
Source: FE Analytics Market Intel Tool
The above table turns things on their head and reveals the funds that were hit by a fall in professional investor research during the first month of the year.
In the case of some – such as Jupiter European, Artemis US Select, LF Lindsell Train UK Equity and Fundsmith Equity – this is down to the fact they proved to be very popular in 2017 and have simply lost share as advisers broadened out their research.
However, other funds on the list – with LF Woodford Equity Income, Troy’s Trojan fund and Standard Life Investments Global Absolute Return Strategies – have just gone through a period of lacklustre returns and may have lost some professional investor interest as a result.