According to the Investment Association, the top sectors of 2015, by net sales, were UK Equity Income, Targeted Absolute Return and Europe ex-UK. Fund groups lucky enough to have funds in these sectors will have had a good year, and if their funds were on any shortlists, they probably had a great year. How much impact does being selected by a gatekeeper have on a fund's fortunes? We ran our gatekeepers analysis to find out which funds had performed best and whether there was any correlation between performance and the number of selections they had attracted. All of the funds shown below are ranked on their three-year returns. The tables below include a mix of the best funds by performance and the funds with the most gatekeeper selections. The ones with the most gatekeepers usually attract the most flows.
The trend for outsourcing investment has grown sharply in recent years, and with the advent of pension freedom it is only going to get bigger. Model portfolios and robo-advice are currently the talk of the town, but in the background funds of funds have been hoovering up assets.
According to Fundscape’s latest report Deconstructing the UK Funds of Funds World, FOF assets may only represent 12% of the total fund industry AUM (June 2015), but they punched well above their weight with 52% of industry sales in H1 2015. So in short, it pays to be part of this expanding market.
It's been an exciting week in lots of ways. Firstly, there was the announcement that Neil Woodford is leaving Invesco Perpetual next year, and that his funds are to be managed by Mark Barnett. The industry reacted with immense shock and I suppose that after 25 years, Woodford was very much an integral part of the furniture. But to a certain extent it was also unsurprising — in a world where fund managers jump ship on an all too regular basis, it was just as surprising that he hadn't gone to another fund manager, or started up his own fund group years before. The difficulty that Invesco now faces is a potentially significant shift of assets from its two flagship funds to other fund managers; some fund managers are already rubbing their hands in glee at the idea of the fresh flows coming their way, but hopefully some will give Barnett the benefit of the doubt. Whatever happens, he is going to find Woodford a very hard act to follow.