Three
UK-domiciled
funds
got
their
2024
off
to
a
flying
start
by
attracting
large
inflows
despite
serious
macroeconomic
headwinds,
Morningstar
data
shows.
Out
of
285
funds
worth
£1
billion
and above,
for January, the
Five-Star
M&G
Japan
fund,
managed
by
Carl
Vine,
came
in
first
place,
pulling
in
over
£303
million.
The
Four-Star
Royal
London
UK
Core
Equity
Tilt
fund,
meanwhile,
co-managed by Nils
Gene Jungbacke and
Mike
Sprot,
followed
suit
with
inflows
of
over
£212
million
in
the
first
month
of
the
year.
In
third
place,
the
£7.9
billion
ACS
World
ESG
Insights
Equity
fund,
which
is
run
by
BlackRock,
absorbed
£207.5
million.
M&G
Japan
Carl
Vine’s
fund
continues
to
be
popular
with
retail
investors,
with the £2.3
billion M&G
Japan
strategy,
which
invests solely
in
large-cap
Japanese
companies,
boasting
a cumulative
return
of
34.71%
over
the
three
years
to February 2024.
Although
the
fund
slightly
underperformed
the
Morningstar
Japan
Index TME,
which
returned
41.77%
over
that
same
period.
However,
Morningstar analysts
point to
the
success
of
the
fund
since
Vine
took
the
reins
at the
beginning
of
October
2019.
They
say
he
has
provided
an
“impressive”
performance,
delivering
a 7.5% annualised return versus
2.8%
and
2.4%
for
the
Morningstar
Japan
TME
Index
and
the
Morningstar
Japan
large
cap
peer
group,
respectively.
The
significant
outperformance
has
been
driven
by
Vine’s
stock
selection,
especially
within
industrials
and
consumer
cyclicals
sectors. While investing
in Socionext
(6526),
Mitsui
O.S.K.
Lines
(9104),
and
Hitachi
Zosen
(7004), paid
off
because they
returned multiples
more
than
their initial investment, although contributions
have been broad based
elsewhere.
The
fund’s
current
top
holdings
range
from
Mitsubishi
UFJ
(MUFG),
Toyota
(7023),
to
Seven
&
I
Holdings
(3382).
Royal
London
UK
Core
Equity
Tilt
The
£6.1
billion
Royal London
UK
Core
Equity
fund
has
bucked
trends,
absorbing
inflows
despite
the
exodus
of
investor
cash
from
UK equity
funds.
The
fund
outpaced
the
Morningstar
UK
All
Cap
TME
Index
over
the
three
years
to
February
2024,
returning
25.52% versus
the
index’s
own
24.08%
return.
From
December
2021
to
December
2022
the
fund
had
a
measly
return
of
only
1%,
but
the
following
year
from
December
2022
to
December
2023
its
performance
improved
to
9%.
The
fund’s
top
sector
holding
is
financials,
at
23%
of
the
portfolio,
with
consumer
staples
and
consumer
discretionary
following
suit
at
14.3%
and
12.3%
of
the fund,
respectively. its
top
holding
is
Shell
(SHEL)
at
7.3%,
which
drove
strong
returns
following
Russia’s
invasion
of
Ukraine
and
western
introspection
over
energy
supply.
AstraZeneca
(AZN),
HSBC
(HSBA),
Unilever
(ULVR),
and
BP
(BP)
are
also
top
holdings
of
the
fund at 7.0%,
5.4%,
4.3%,
and
3.6%,
respectively.
However,
Morningstar
analysts
give
the
fund their
second-lowest
Morningstar
Sustainability
Rating
of
two
Globes,
indicating it
holds
securities
with relatively-high ESG
risk
compared
to
those
of
its
peers
in
the
UK
Equity
Large
Cap
category.
The
fund
has
18.5%
involvement
in
fossil
fuels,
surpassing
15.2%
for
the
average
peer
in
its
category, and exhibits high
exposure of 13.54%
to
other
firms
with
severe
controversies.
ACS
World
ESG
Insights
Equity
Fund
Launched
in
April
2021,
this
£7.9
billion
fund experienced
its
best
year
of
performance
in
2023,
returning
16.5%,
just slightly
shy
of
the
FTSE
World
Index
Developed
benchmark,
which
saw
a
return
of
16.6%.
However,
the
fund
did
not fare well
in
its
first full
reporting year,
with
it
suffering
underperformance
of
–8.24%
in
2022.
The
benchmark
lost
-7.8%.
The
fund’s
top
holding
is
Microsoft
(MSFT)
at
5.52%
of
the
fund,
swiftly
followed
by
Apple
(APPL)
and
Nvidia
(NVDA),
which
are
held
at
4.99%
and 2.47%,
respectively.
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