IA 100 Club  

IA 100 Club: Style shift sees value funds dominate

IA 100 Club: Style shift sees value funds dominate
Investment landscape: What investors have been buying in the past year

Another 12 months of sharp shifts in sentiment have produced significant changes to the Investment Adviser 100 Club, with 2017’s cohort notable for the presence of several value-orientated equity strategies.

Half of the 20 categories in this year’s shortlist have seen complete overhauls in terms of members, and only nine funds make a reappearance from 2016. Much of this can be attributed to the change in market fortunes witnessed in the 12 months to the end of May 2017.

Value equity strategies – despite having struggled somewhat in 2017 – truly came back in vogue in the second half of last year. As a result, the UK, European, Global and Emerging Market 100 Club groups all have new members, with those advocating long-term value investing coming back to the fore. In the UK space this manifested itself with the likes of Jupiter’s Ben Whitmore and River & Mercantile’s Hugh Sergeant, and with Henderson’s John Bennett in Europe. Mr Sergeant and Mr Bennett last made 100 Club appearances in 2014.

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Value and growth equity indices have battled it out for dominance over the past 12 months, a time when growth and inflation expectations bounced back in a number of developed markets.

Meanwhile sterling weakness helped boost the earnings and share prices for larger UK-listed companies, aiding large-cap managers. As a result, just one mid-cap manager makes it into the category this year – a return for 2015’s winning fund Old Mutual UK Mid Cap, run by Richard Watts.

In the Smaller Companies section, 100 Club regular Liontrust UK Smaller Companies fell out this year, having previously appeared in 2016, 2014 and 2012.

Elsewhere, there was a complete overhaul of funds in both the Specialist Bond and Strategic Bond categories. Since the 2014 awards only two funds have made repeat appearances in the Specialist Bond group. The past year was a strong period for high-yield investors, with all five shortlisted funds operating in the space. There was more consistency in the Corporate Bond category, with two longer-dated strategies returning from 2016.

Overall, the 2017 100 Club bears little resemblance to previous years. The Henderson UK Absolute Return fund  fell out following four consecutive years in the Absolute Return category. No absolute return funds made a repeat appearance in what was a difficult period for the space.

As ever it is the group categories that are the most consistent, with eight out of the 15 firms making a repeat appearance. Baillie Gifford is of particular note, achieving its fourth consecutive nomination in Large Investment Group.

Last year, Investment Adviser declared the 2016 shortlist to be the “most diverse ever”. Following another 12 months of unexpected market reactions and political volatility, a shake-up has occurred once more.

100 Club Trends

10 out of 20

Categories with entirely new members compared with 2016

8 out of 15

Firms returning to the group categories from 2016

9 out of 85

Funds returning to sector categories this year

18 out of 85

Number of investment trusts in this year's 100 Club

2 out of 5

Number of Janus Henderson funds in the European Equity group