A new favourite UK growth fund has stormed to prominence within Asset Allocator’s database.
iShares Core FTSE 100 ETF has become the most popular UK growth fund among the allocators we cover, overtaking funds run by Nick Train, Alex Savvides (until very recently) and Anthony Cross and Julian Fosh.
The BlackRock mandate is now owned by eight allocators in our database, overtaking Lindsell Train UK Equity and JOHCM UK Dynamic, each held by seven fund houses, and Liontrust Special Situations which is held by six.
That UK Dynamic fund is likely to drop further down the rankings as fact sheets are updated, as it was recently revealed that investors withdrew about £8mn a day from the fund in January, folllowing the announcement that Savvides is leaving for Jupiter.
It is not especially unusual that the most popular fund in a sector of our database be passive – for example the most popular fund in US equities has long been Fidelity Index US.
But crucially, this marks the first time in our records that the most popular UK growth fund is passively-managed, indicating that many of the cost pressures baring down on allocators could be having an effect.
We could easily talk about style tilts and allocation calls here, but the fact the iShares fund has an OCF of 0.07 per cent while Lindsell Train charge 0.65 per cent for their UK fund and JOHCM charge 0.8 per cent for theirs will answer plenty of questions.
It’s been a month of good news for this particular iShares offering, which has attracted £183mn of inflows in January, according to data from Morningstar Direct. The ETF is now an eye-watering £10.7bn in size and is almost on par with its North American index counterpart, which now stands at £11.5bn.
Not too long ago we posed the question as to whether allocators had got cold feet on Nick Train’s flagship UK equity fund.
Five years ago, it was Lindsell Train and Liontrust Special Situations that were dominating the sphere, with 11 and 10 owners respectively.
But the rise of iShares across several equity regions may prove a headwind for active fund managers seeking to attract inflows.
It will certainly give food for thought to the fund houses which are reshuffling their management teams in a bid to boost the popularity of their UK equity funds.
