Schroders Income and Jupiter Global Value Equity ‘return to favour’

But Baillie Gifford drops out of top 10 fund groups by gross sales, according to the Pridham Report

Pension fund's fee demands reassuring for advisers

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Investor pessimism has led to significant outflows across the majority of asset classes in the third quarter of 2022, according to the Pridham Report, as both gross and net retail sales trended down compared with Q2. The data from the report, which monitors quarterly retail sales of groups’ UK-domiciled funds, suggests that investors continue to be reticent about deploying their capital.

There was hope for a sustained recovery in July, but market optimism was quickly quashed by the gloomy Bank of England monetary policy report in August.

As has been widely reported, equity funds bore the brunt of the uncertain outlook for stock markets in the third quarter, suffering the bulk of redemptions. However, the Pridham Report noted that “some savers say a buying opportunity”.

“The return to favour of value resulted in strong sales of the Schroder Income Fund, managed by the highly-regarded Schroder Global Value Team, as well as the Jupiter Global Value Equity Fund, managed by long-tenured fund managers Ben Whitmore and Dermot Murphy (both pictured).”

In this cautious environment clients continued to put their faith in the largest players in UK asset management. Blackrock, the UK’s largest asset manager, topped the table for gross sales with £5.8bn, having also taken first place in the previous two quarters of this year. Total sales were down more than £3.2bn on Q2, however.

Among the top 10 for gross sales, only Jupiter managed to surpass its Q2 figure after increasing sales by £17m from Q2 to Q3. Otherwise, much of the top 10 simply traded places, the only newcomer being Columbia Threadneedle, which crept in at number 10 at the expense of Baillie Gifford. The change came after the completion of the Columbia’s rebranding of BMO Global Asset Management’s funds, having acquired the firm last year.

 

Top 10 managers by gross retail sales Q3 2022 (£m)

1BlackRock £5,779.30
2Legal & General IM£3,574.80
3Fidelity £3,572.90
4HSBC AM£2,449.10
5Royal London AM £2,004.00
6Jupiter £1,601.50
7JP Morgan AM£1,440.00
8Schroders £1,342.60
9Liontrust£1,312.00
10Columbia Threadneedle £1,124.60
Source: The Pridham Report

 

With continued outflows across the industry, there was more variation in the top 10 net sales table; Blackrock slipped out of the top 10 for the first time this year, having been second in Q1, while Fidelity kept its place at the top of the rankings. Fidelity has returned the highest net sales in each quarter of this year, yet Q3 saw the asset manager rake in £1bn less than in the first quarter of 2022.

Rathbones, Hargreaves Lansdown, Alliance Bernstein, and Orbis Investments were all new arrivals to the chart, while last quarter’s newcomers Allianz Global Investors and Edentree both retained their positions in the top 10.

 

Top 10 managers by net retail sales Q3 2022 (£m)

1Fidelity
£512.50
2Legal & General IM£487.10
3HSBC AM£383.60
4Allianz Global Investors £289.50
5EdenTree£102.90
6Royal London AM£36.00
7Rathbones £26.10
8Hargreaves Lansdown£24.00
9Alliance Bernstein £14.80
10Orbis Investments £10.10
Source: The Pridham Report

 

A large proportion of the outflows that funds experienced this year were in equities, yet the relative attractiveness of value stocks resulted in strong sales of the Schroder Income and the Jupiter Global Value Equity funds.

The economic outlook continues to look uncertain, and Pridham says that investors are likely to remain cautious. With an eye on the future, the report concluded: “Fixed income funds may see further demand, although investors may also reassess their equity exposures as valuations become more attractive.”

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