According to new data from Defaqto which are released today, single asset funds accounted for nearly 35% of all fund recommendations last year.
Between 1st April 2022 and 31st March 2023, single asset fund recommendations equating to a value of £12.6bn were made through Defaqto’s Engage software. This is a 47% increase in single asset fund recommendations over the last three years, up from £8.6bn for the year ending 31st March 2020. It challenges the industry perception that multi-asset funds form an overwhelmingly large majority of adviser recommendations.
With nearly 75,000 share classes of over 13,000 single asset funds available, it can be difficult for funds to stand out to advisers without the right ratings and reviews. Defaqto’s data shows that advisers’ top search criteria last year were performance returns, followed by Diamond Ratings, which was a more popular factor than costs or ratios when researching single asset funds.
Funds receive a Defaqto Diamond Rating based on a completely independent and unbiased quantitative assessment, using a detailed, robust and transparent research process. Advisers across more than 3,500 adviser firms use Defaqto’s Engage financial software, and these ratings and reviews help narrow their market search for single asset funds to a more manageable number.
With the rise of single asset funds, Defaqto has appointed single asset fund expert Rion Barker to help fund and asset managers promote and distribute single asset funds.
As business development manager, Rion joins from Fintel Group sister company SimplyBiz where he spent more than 6 years. There he managed relationships with over 60 of the business’s largest provider partners spanning wealth and asset management, investment platforms and non-mainstream investing.
At Defaqto, Rion will help asset managers to raise visibility of their funds among financial advisers through Diamond Ratings, Risk Ratings, Fund Reviews, ESG Reviews, Analytics, and events.
Glenn Porter, Chief Commercial Officer at Defaqto, said: “As our data shows, the trend towards single asset funds is compelling. They have become an important focus for us because of the huge increase in recommendations we’ve seen. We are uniquely positioned in the market to raise the profile of funds that both assist asset managers in distribution and support advisers in making smarter financial decisions for their clients. Rion’s appointment continues our commitment to enhancing the advice journey for advisers and their clients.”
Rion Barker said: “Having followed the expansion of the single-strategy universe, I’m very excited about the growth in this area and joining Defaqto’s team of experts. The industry in general tends to focus on multi-asset; however, as our data shows, the single asset market is very much alive and well.”
