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Retail therapy

Crunching the numbers is very much Asset Allocator's bread and butter and, as autumn dissipates in the face of winter's force and year winds its way to a close, we thought we'd have a look at how the DFMs we cover performed relative to the best buy lists offered by retail platforms.

We examined the buy lists of Hargreaves Lansdown, AJ Bell and Interactive Investor, across the Global, Strategic Bond, UK Equity Income and North America sectors. 

Any such analysis in 2022 throws up plenty of red ink of course, but also reveals DFMs are earning their crust, at least in the equity allocations as they outperformed all the buy lists.

In the North America sector this was particularly pronounced, as DFMs' most popular choices lost just 3 per cent, while fund pickers' choices lost between 6 and 30 per cent.

It is Hargreaves Lansdowns's Wealth Shortlist which is responsible for the average 30 per cent loss this year to date in North America - mainly down to its inclusion of the Baillie Gifford American fund which has had a terrible year, losing more than 45 per cent.

One fund which DFMs in our database agree with the retail platforms on is Artemis US Smaller Companies - it is one of the most popular North American funds in our database and is tipped by all three platforms.

The most widely-owned North American equity mandate among the allocators we cover is of course JPMorgan US Equity Income, which is also the most widely owned fund in all sectors of our database.

Demand has been strong in 2022, with a net four new DFMs taking a position in Clare Hart's fund. It also appears on AJ Bell's buy list.

And, perhaps as you'd expect from a fund with an income bent, it has performed well this year returning more than 8 per cent.

The fund which seems to have tipped the balance in North America towards DFMs was Dodge & Cox US Stock. None of the retail platforms tip this fund but eight DFMs hold it and it has returned 6 per cent under this year's trying circumstances.

The only sector where DFMs failed to come out on top was with strategic bond funds. Here the buy lists' losses ranged from 11 per cent to 18.1 per cent. The DFMs most popular picks lost 18.06 per cent - only narrowly beating AJ Bell.

Here it was Hargreaves Lansdown's picks which came out on top.

The retail platforms are all in agreement with DFMs on the matter of Jupiter Strategic Bond, which is widely popular, though performance has struggled this year due to owning long duration positions just as inflation began to bite. 

And AJ Bell agrees with DFMs on Allianz Strategic Bond, which takes a less macro and more technical view of the world (the manager Mike Riddell knows more about the yield curve and convexity than almost anyone else we've met in the market) and is now owned by seven of the allocators we cover. 

None of the other most popular strategic bond funds among DFMs (Janus Henderson Strategic Bond, Schroder Strategic Credit and TwentyFour Dynamic Bond) are tipped by retail platforms.

The thing which seems to have swung it for Hargreaves is its choice to back Invesco Tactical Bond and M&G Macro Global Bond.

These are held by only two DFMs each but have been strong performers.

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