Advisers shifted their attention to income-generating strategies in the final quarter of 2022, according to Square Mile’s latest Market Intelligence report.
Income increased its overall share of adviser searches on Square Mile’s Academy of Funds, shooting up 7.8 percentage points, while capital accumulation strategies dropped to 40.7%. Though this marked a sharp fall from 51% of all searches it notched up in the previous quarter, the strategy was still the most researched investment outcome.
According to Square Mile, the shift suggests advisers are looking at solutions that can help their clients keep up with rising expenses during the cost-of-living crisis.
The quarterly report is a register of viewing patterns among users of the investment research firm’s Academy of Funds. In Q4, the academy attracted 5,819 unique visitors and 52,527 page views.
There are currently 354 funds in the Academy of Funds after two newcomers were added in the December update, which also saw the ratings of five fixed-income strategies upgraded.
Aegon and Ninety One active funds receive most views
Two funds shared the top spot for the most viewed actively-managed strategies, with Q3 frontrunner Ninety One UK Alpha fund joined by the Aegon Diversified Monthly Income offering. Both accounted for 2.7% of the searches for active managers.
The Wellington Global Impact Bond strategy attracted the most interest for responsible funds – another income-generator. It was followed by two First Sentier solutions, with the firm toppling Baillie Gifford as the most searched company.
Abrdn’s Global Corporate Bond Tracker rose to second spot in the most-viewed passives, with the Vanguard LifeStrategy 80% Equity generating the most searches.
In terms of Investment Association (IA) sectors, the UK All Companies garnered the most attention from Square Mile users, as it did in the previous two quarters. This was followed by the Mixed Investment 20-60% shares and Targeted Absolute Return sections of the IA universe.
Jock Glover, Square Mile strategic relationships director, said: “While strategies that provide inflation protection experienced a considerable uptick in adviser interest in Q1 of last year, this had dropped back down by the final quarter. This reflects a broader feeling that inflation may finally be waning, and we expect headline rates to fall further in the coming quarter. The key question remains over where they will end up over the medium term.
“Funds with the potential of income as an investment outcome have always been in demand, but it is perhaps no coincidence that there has been such a strong uptick in adviser research in this area, coming at a time when a combination of inflation and higher interest rates are stretching household disposable income.”
This article first appeared in our sister publication Portfolio Adviser
