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Turning tides

The latest flows data from Morningstar reveals a sea change in how allocators are positioning. 

The data, covering the month of August, shows sustainable investing categories saw their first net outflows since March 2020, with £199m exiting the business.

Fundsmith remains the largest fund in the UK retail space but had another period of outflows in August, with £450m being pulled from the behemoth.

The other well-owned fund to suffer during the month was BlackRock European Dynamic, which had outflows of £419m.

Both mandates remain popular with the allocators on our database. The BlackRock fund appears in eight portfolios, while Fundsmith is in six. 

The BlackRock fund may also be a casualty of the Europe ex-UK sector in which it appears, with £1bn pulled from this sector in August.

Equity fund outflows were £5.2bn in the month, the worst performance for 10 years. 

In contrast, most of the bond fund categories recorded inflows.

The drinks will be on Allianz this month, with the folks at 199 Bishopsgate recording net inflows of £250m for their Strategic Bond fund.

The mandate, which is already over £2.5bn in size, is run by the well-regarded Mike Riddell and team. Unlike some other bond teams, they tend to focus slightly less on the macro and more on the technicals, and on exploring some of the lesser-spotted areas of the bond universe. 

At a time when macro is mired in historic levels of uncertainty, investing in the vagaries of the yield curve may be a more appealing option.

The Allianz Strategic Bond fund is a popular mandate among the allocators we cover, appearing in seven portfolios. 

There have been three new purchases this year, though it is an indication of how the fund may have had a slower 2021 in flows terms that its net figure on a 12 month basis is a negative £16m.

The fund with the biggest outflows of the lot during August was BlackRock ACS World ex-UK, a global tracker fund from which investors pulled £457m. That fund has shed a smidge over £1bn in the past year. 

It isn’t held in the portfolios of any of the allocators we cover. 

That contributed to BlackRock having the largest net outflow of any UK firm in August, at £434m.

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