Advisers have been shifting their focus from fixed income assets to multi-asset strategies in the first quarter of 2015, a report from Square Mile Investment Consulting and Research has revealed.
Analysis of the web traffic at the investment research consultancy found views of fixed income funds accounted for just 17 per cent of its searches in the quarter, down from 21 per cent in the fourth quarter of 2014.
However, views for multi-asset funds have increased 4 per cent to 20 per cent of searches, with cautious multi-asset funds in particular enjoying a boost.
Appetite for equity and property funds remained roughly the same, at 59 per cent and 4 per cent of the site’s traffic respectively.
The data suggests bonds may be losing their status as the low-risk assets of choice, as the yields available on government debt falls and the prices rise.
The yield on Swiss 10-year bonds dipped below zero last week and German 10-year bund yields have now sunk as low as 0.15 per cent, while 61 per cent of the bonds in the Citi World Government Bond index have a yield of less than 1 per cent.
Richard Romer-Lee, managing director at Square Mile, attributed the shift to a “prolonged low interest rate environment”.
Declining interest in fixed income assets has been accompanied by a dramatic leap in appetite for information about cautious multi-asset funds.
The Investment Association (IA) Mixed Investment 20-60% Shares sector, formerly known as the Cautious Managed sector, registered double the percentage of views on the site than in the fourth quarter of 2014.
The sector gained 6.3 percentage points to reach the top spot in the Square Mile sector table, a move that was accompanied by a striking fall in views for the IA Mixed Investment 40-85% Shares sector, down 7.6 percentage points from the fourth quarter.
Mr Romer-Lee said the change in multi-asset sector focus was “explained in the main by the high viewings of the Investec Cautious Managed fund, and perhaps advisers looking more broadly for solutions-based managed funds for their clients”.
The Investec fund has garnered the most views this quarter at 2.9 per cent, trailed by Aberdeen Asia Pacific & Japan Equity and Kames UK Equity Absolute Return at 2.4 per cent each.
Advisers’ increasing tendency towards diversification was also shown by the considerable growth in interest in risk-targeted funds, with the L&G Multi-Index funds dominating the table.
This may be explained by the report’s findings on preferred investment outcomes. The most popular search in the first quarter was for capital preservation, with income and capital accumulation occupying most of the remainder of advisers’ interest.
The data for Square Mile’s report was collected from the online behaviour of around 1,000 users registered to the Academy of Funds, an online tool providing investment research, fund ratings and video briefings to subscribers.
The firm was founded by Mr Romer-Lee and four others in January 2014 to work with advisers, financial service institutions and asset managers.
