Baillie Gifford retains crown as active investors’ favourite fund firm
Baillie Gifford remains investors’ favourite, despite a number of its funds falling out of form in 2021.
8th February 2022 14:29
by Kyle Caldwell from interactive investor
Baillie Gifford remains investors’ favourite, despite a number of its funds falling out of form in 2021.
Baillie Gifford is the most successful active fund manager in attracting investors to its fund range for the second year running, according to the widely followed Pridham Report.
The report, which has monitored fund sales and asset trends among UK investors for more than 20 years, ranked Baillie Gifford in third place for gross retail sales in 2021 (£14.2 billion) and in first place for net retail sales (just over £3.8 billion). Net sales are assets remaining after investor withdrawals, while gross sales take into account only new money invested.
BlackRock and Legal & General were in the top two spots for gross sales, attracting £28 billion and £15.2 billion respectively. For both, it was sales of passive funds that were the main drivers of their success.
Baillie Gifford remains active investors’ favourite fund firm, despite a number of its funds falling out of form in 2021, including Baillie Gifford American, Baillie Gifford Long Term Global Growth, Baillie Gifford Positive Change and Baillie Gifford Global Discovery. The four funds were in the top 10 for active fund performers in 2020, however in 2021, each fund significantly underperformed rivals.
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The Pridham Report noted that investment flows slowed into Baillie Gifford’s fund range “as the year progressed”, as “some investors decided to switch to value investing”.
It points out that one of the fund firms benefiting from the increased appetite for value shares is Schroders. Schroder Global Recovery, run by its value investing team, was one of its top-selling funds in 2021.
Liontrust, Rathbones and Royal London benefited from strong demand for funds that invest in a socially responsible fashion by applying ESG (environmental, social and governance) criteria.
Each firm has funds in the interactive investor ACE 40 list, namely Royal London Sustainable Leaders, Royal London Ethical Bond, Royal London Sustainable Diversified Trust, Royal London Sustainable World, Liontrust UK Ethical 2, Liontrust Sustainable Future European Growth, Liontrust Sustainable Future Corporate Bond and Rathbone Ethical Bond.
BMO Global Asset Management, whose heritage of sustainable and ethical investing goes back to the 1980s, also attracted more attention from investors. It rose into the top 20 for net sales in 2021, and in the fourth quarter it reached the top 10. Three of BMO’s sustainable funds form part of interactive investor’s Quick-start Funds range for beginner investors; BMO Sustainable Universal MAP Cautious, BMO Sustainable Universal MAP Balanced and BMO Sustainable Universal MAP Growth.
A notable absence in the top 10 fund sales tables is Vanguard. The Pridham Report said that this is down to the firm failing to provide its figures. The report said: “Unfortunately, Vanguard continues to shun transparency by failing to provide its figures.”
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Top 10 fund firms by gross retail sales in 2021
| Ranking | Fund firm | Gross retail sales (£ billion) |
|---|---|---|
| 1 | BlackRock | £27,979.90 |
| 2 | Legal & General IM | £15,216.70 |
| 3 | Baillie Gifford | £14,210.40 |
| 4 | Fidelity | £13,273.10 |
| 5 | Liontrust | £10,447.00 |
| 6 | HSBC AM | £10,178.90 |
| 7 | Royal London AM | £9,255.80 |
| 8 | Schroders | £8,364.50 |
| 9 | JPMorgan AM | £6,798.50 |
| 10 | Fundsmith | £6,249.20 |
Source and copyright: The Pridham Report.
Top 10 fund firms by net retail sales in 2021
| Ranking | Fund firm | Net retail sales (£ billion) |
|---|---|---|
| 1 | Baillie Gifford | £3,764.30 |
| 2 | Liontrust | £3,651.00 |
| 3 | HSBC AM | £3,265.80 |
| 4 | Legal & General IM | £2,412.40 |
| 5 | Rathbones | £2,077.80 |
| 6 | Royal London AM | £1,821.90 |
| 7 | Allianz Global Investors | £1,537.90 |
| 8 | BlackRock | £1,347.10 |
| 9 | Fidelity | £1,014.60 |
| 10 | Schroders | £982.40 |
Source and copyright: The Pridham Report.
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