We compared Gatekeepers in 2017 to 2016 to look for any emerging trends or changing preferences. But it's safe to say that 2017 can be characterised as a year when Gatekeepers continued to stick with big-name funds, despite their non-appearance as top performers. Meanwhile lesser-known funds outperformed, but were unable to get on fund selectors' radars or if they had been noticed, get fund selectors to up their exposure.
The introduction of transaction cost disclosure was intended to provide greater transparency. However, with an utter disregard for common sense that characterised MiFID2’s generally inglorious introduction, the regulators provided fund managers with two diametrically opposed calculation methodologies. As a result, fund managers, ACDs, data providers and platforms have between them contributed to organisational chaos.
After almost two decades of the market being dominated by three or four technology providers, there are several new platform technologies emerging. There’s been a lot of noise about Hubwise and Embark, but Seccl will soon be out there drumming up business too. All of them have the potential to disrupt the platform market. Their competitive advantage lies in the fact that they provide pared down, focused propositions that have none of the legacy technology and inefficiencies in existing technologies.
ISA activity was less pronounced in the third quarter of 2017, with sales dropping to £1.5bn. However, pensions picked up the slack and generated around 70% of platforms’ net flows. This was due to a combination of investors exercising their pension freedom rights and the steady pipeline of DB transfers.
Our Gatekeepers series continues with a review of the UK All Companies sector. View the top ten UK All Companies funds in the second quarter here.
With 225 actively managed funds, the IA UK All Companies sector has been seen as the bellwether for asset allocators looking for broad-based exposure to UK Equities. However, according to the Investment Association, it has been the worst-selling retail sector since 2010 (with the exception of 2013 when sterling corporate bond assumed the mantle).
Although June and July were stonkingly good months for global equity, we haven’t lost sight of the fact that the Targeted Absolute Return (TAR) sector had the highest net sales figure for the first six months of the year.
As part of our ongoing Gatekeepers research, we're focusing on a different sector each week. This week it's the global sector, the bestselling sector of the past year.
Adviser portfolios tend to follow asset allocation templates that disaggregate global equities into regional, single-strategy funds, so you would expect the one-stop-shop global equity fund to be a less popular alternative. It’s a surprise, therefore, to see the Global Equity sector consistently topping the sales charts.
Last year, the Gatekeepers report caused a stir in the industry by being the first to shine a light on potential biases in fund ratings. This year’s edition is bigger, better and bolder with a wealth of practical information to help fund managers navigate this challenging post MS15/2.3 market. As well as re-assessing the gatekeeper market, we’ve taken a closer look at the efficacy of active fund management, sorted the really active wheat from the closet-tracking chaff, and looked at the value chain from a regulatory perspective and the potential for further scrutiny and investigation.
We ran the spring sentiment survey in the last week of April (we waited until after the first round of the French presidential election on 23rd April) until mid May.
In all, there were 84 responses. Fund groups represented 62%, platforms 25% and distributors 13%. The audience was mainly British (77% ) and the rest cross-border.
We're in an extended lockdown phase as several platform clients will not be reporting their results to the stock exchange until March. That's a pretty long wait so here are a few investment platform industry highlights to keep you going until the Fundscape Platform Report is issued.