Baillie Gifford and Liontrust have raked in their highest quarterly sales figures yet, according to the latest Pridham report, as investor piled out of passives and loaded up on active and sustainable funds.
As Covid rocked markets toward the end of Q1 investors fled active funds for passive products. But by the second quarter the tide had turned.
Baillie Gifford finished second for net retail sales, attracting £1.1bn in Q2, while Liontrust came in third with a record £964m in net sales.
Both fund groups also racked up their highest quarterly gross flows, coming in at fifth and sixth place for the period with sales hitting £2.6bn and £1.9bn respectively.
Baillie Gifford Positive Change singled out as top seller
While Baillie Gifford American was the Edinburgh manager’s most popular fund over the quarter, the report also singled out Positive Change as a top seller.
The £899.7m fund, run by a team of five that includes Kate Fox (pictured), Julia Angeles and Lee Qian, was the fourth best performer in the IA Global sector over the first six months of the year, returning 34.3% compared with the sector’s gains of 1.0%.
Liontrust and Royal London AM also benefited from having a range of sustainable funds, the report noted.
Half of Liontrust’s net flows came from its Sustainable Future range, while 80% of RLAM’s £1.3bn in net sales were linked to money coming into its sustainable funds like the RL Sustainable Leaders range. A surge in demand for RLAM’s sustainable funds saw it snag the top spot for net flows, with quarterly sales surging above the £1bn for the first time.
“Royal London Asset Management has been promoting sustainable funds for some years, but it has pointed out that Covid–19 has been the catalyst that has encouraged investors and advisers to take more notice of these funds,” said Helen Pridham, editor of the Pridham report.
Passive houses fail to keep up
By contrast predominantly passive providers, like Blackrock and HSBC Global Asset Management, which dominated in Q1 saw more sluggish net sales.
Blackrock went from first to fifth place quarter-on-quarter with net flows of £823.3m, while HSBC Gam, which had the second highest sales in Q1, tumbled to ninth place with flows of £526.4m.
Fidelity, which straddles both active and passive funds, finished fourth for net sales, though the Pridham report noted it had seen a rise in sales of its active funds with Fidelity Global Dividend, Emerging Markets, Asia Pacific Opportunities and Global Technology among its top sellers.
Pridham predicted “the focus on ESG funds is likely to grow” but cautioned the outlook for markets remains uncertain.
“Markets will remain volatile for the rest of the year so fund companies will need the right products and performance to succeed,” she said.