Tracker funds and those with an environmental, social & governance (ESG) focus have been key themes amongst the IA Global funds with the highest level of inflows over the past year, research by Trustnet has found.
While this speaks to the changing appetite of the market, well-known active strategies have also attracted a strong level of inflows over the course of the year.
Using data from FE Analytics, the level of inflows towards these global funds over the course of the year is looked at, with reference to its size now compared to a year ago.
The inflow figure represents the underlying change in size attributable to investor in-/outflows over the year period, it must be noted that this is an approximation.
Alongside the familiar names, capital has flowed towards infrastructure and pharmaceuticals, something that perhaps could become a recurring theme of this list over the next decade.
Top-25 global funds with the largest approximate inflows
Source: FE Analytics
The top three on the list, the BlackRock ACS World ex UK Equity Tracker, Vanguard FTSE Developed World ex-UK Tracker and BlackRock ACS World ESG Equity Tracker reflect a wider trend towards passive strategies.
Having said that, the presence of trackers alone is not the main theme and the level of inflows toward ESG funds over the past year is more telling of market sentiment.
There are eight ESG funds – mostly passive – among the top-25 funds attracting the most inflows.
The top three in that category are all BlackRock strategies: BlackRock ACS World ESG Equity Tracker, BlackRock ACS World Low Carbon EQ Tracker and BlackRock ACS World ESG Equity.
They are joined by BlackRock ACS Climate Transition World Equity and BlackRock ACS World Multifactor ESG Equity Tracker further down the list.
Global ESG funds with the largest inflows
Source: FE Analytics
Another ESG tracker, albeit not one overseen by BlackRock, is the L&G Global Developed Four Factor Index fund, which aims to provide a combination of income and growth by tracking the SciBeta Developed Low-Carbon & ESG High-Factor-Intensity Multi-Beta Maximum Deconcentration index.
This passively managed strategy uses the four risk factors of its index as the basis of its investment philosophy. This consists of value, low volatility, momentum and quality, which the L&G team adhere to when constructing the portfolio.
The only active strategy within the dedicated ESG funds, is the Liontrust Sustainable Future Global Growth fund, run by Peter Michaelis, Simon Clements and Craig Foster.
While this fund was launched in 2001, the growing interest in this area of investing looks set to grow over the next decade as an increasing number of strategies mature.
Since launch, the fund has returned 229.88 per cent compared with a 193.58 per cent gain for the IA Global.
After LF ACCESS Global Equity – a local government pension strategy which drew in over £1bn in inflows over the past year – Baillie Gifford Positive Change saw the greatest level of inflows for an active strategy.
The growth-focused fund aims to deliver positive change in one of four areas: social inclusion and education; environment and resource needs; healthcare and quality of life; and ‘base of the pyramid’, which addresses the needs of the world's poorest populations.
Baillie Gifford Positive Change fund doesn’t reflect the stark net change in fund size, growing from £153m in size a year ago, to £1.2bn now.
Historical breakdown of fund
Source: FE Analytics
One of the best-selling funds during the lockdown period, the fund, managed by Kate Fox, Lee Qian, Edward Whitten and Michelle O’Keefe has returned 82.98 per cent since this time last year.
Another popular active strategy was the Rathbone Global Opportunities fund, which attracted £551.4m in inflows growing to £2.6bn once performance contribution was factored in.
Managed by James Thomson and Sammy Dow, the fund made a total return of 27.42 per cent to last month-end, benefiting from investments in several beneficiaries of the Covid-19 pandemic, such as Amazon, Adobe and PayPal within its top holdings.
Another popular fund was Fundsmith Equity, run by investing veteran Terry Smith, which according to data from FE Analytics is now at £21.6bn, up from the £18.8bn it was at a year ago, helped by inflows of £348.8m over the past year.
The reputation of the fund and its manager has perhaps signalled a level of stability investors sought when markets crashed in March.
Performance of active funds over 1yr
Source: FE Analytics
The other two active strategies considered are the LF Blue Whale Growth fund and Baillie Gifford Global Discovery, which have both attracted substantial investor inflows.
The LF Blue Whale fund continued to grow since launching three years ago, doubling in size to £550m after inflows of £256m over the past year. The five FE fundinfo crown rated Baillie Gifford Global Discovery fund is run by Douglas Brodie, Luke Ward and Svetlana Viteva.
A £247.9m inflow for the FP Foresight Global Real Infrastructure fund also speaks to the increasing popularity of renewable infrastructure assets as investors seek out higher yielding investment against a backdrop of low rates and dividend cuts.