BlackRock NURS II Consensus 85 and Standard Life Investments Global Absolute Return Strategies topped the list of most sold funds during the first half of the year, according to data from FE Analytics.
Some investors have begun to lose patience with large active funds that have been strong performers over the long-term but struggled to deliver more recently.
However, this is not the case with BlackRock NURS II Consensus 85 – the most sold fund in the first half of the year.
On paper, the fund lost £7.1bn in net outflows taking its assets under management (AUM) from £9.2bn to £1.7bn.
Eagle-eyed readers will have noticed a large number of BlackRock ACS tracker products topping the most bought funds of 2018’s first half.
This new suite of products was launched in April as a default solution for clients allowing them to take advantage of the same tax treatment in respect of their income and gains as they would have done if directly invested in underlying assets.
As such, much of the existing assets invested in the BlackRock NURS II Consensus 85 were transferred to the new products at the start of the tax year.
Rolling 3yr performance of fund over 5yrs
Source: FE Analytics
Without the BlackRock NURS II Consensus 85 fund, Standard Life Investments Global Absolute Return Strategies – otherwise known as GARS – would have the dubious honour of taking the top spot.
The fund, which topped the table in 2017 with net outflows of £4.9bn, has seen that trend continue this year, losing a further £2bn during the first half of 2018.
The behemoth absolute return fund tumbled from £20.7bn to £17.9bn as outflows were coupled with £806m of negative performance.
It has a target to achieve a positive return over a rolling three-year period, but since February those investors that bought the portfolio at the end of each month would have made a loss.
As such, many investors have reallocated their absolute return positioning and one beneficiary has been the Invesco Perpetual Global Target Returns, run by a number of former GARS managers, which has outperformed the GARS fund and wound up on the most bought list for both the first half of this year and during 2017 overall.
Along with GARS, fellow absolute return fund Newton Real Return, run by Iain Stewart, saw large net outflows, dropping from £10.3bn to £9.1bn in AUM once performance was also taken into account.
While it has made positive rolling three-year periods returns for the past five years, at the start of this year the fund flirted with negative territory.
Another theme within the list of funds losing more than £400m in net outflows so far this year is growing aversion to UK equity strategies.
LF Woodford Equity Income, Trojan Income, Invesco Perpetual Income, Invesco Perpetual High Income and iShares UK Equity Index (UK) all crack the list.
Table of most sold funds in H1 2018
Source: FE Analytics
Sashi Reddy and FE Alpha Manager David Gait’s Stewart Investors Asia Pacific Leaders fund is another that has seen outflows this year.
The fund, which sits in the IA Specialist sector, invests in the Asia Pacific region excluding Japan, concentrating on large- and mid-cap stocks.
It focuses on companies that contribute to and benefit from the sustainable development of the countries they are listed in.
The fund underperformed the benchmark MSCI AC Asia Pacific ex Japan index in both 2016 and 2017 by a combined 19.38 percentage points, returning 33.09 per cent.
However, during the first half of 2018 it has returned 3.41 per cent as the index lost 1.73 per cent. Despite this, the fund lost £888m during the first six months of 2018 taking its AUM from £8.5bn to £7.8bn.
Elsewhere Threadneedle Pan European Smaller Companies run by FE Alpha Manager Philip Dicken also makes the list.
This is despite outperforming its average peer in the IA European Smaller Companies in the first half of the year by 3.86 percentage points.
Performance of fund vs sector over first half 2018
Source: FE Analytics
Three global funds – Newton Global Income (£436m), M&G Global Dividend (£470m) and Schroder QEP Global Active Value (£582m) – have also lost more than £400m over the first half of the year.
Unlike the most bought list, there are few passive strategies on the list of most sold funds. The BlackRock NURS II Consensus 85 and iShares UK Equity Index (UK) mentioned above are joined by the BlackRock ACS 50:50 Global Equity Tracker, which was the only other passive fund to lose more than £400m.
Two fixed income funds – M&G Global Floating Rate High Yield (outflows of £415m) and Fidelity Moneybuilder Income (£400m) – and Aberdeen UK Property (£406m) make up the most sold list’s non-equity funds.