Fundsmith and Baillie Gifford shoot up investor value rankings


New research by Boring Money with over 1,500 fund investors at the end of September has found that strong performance has propelled Fundsmith and Baillie Gifford into the top ten fund managers when it comes to consumer perceptions of value.

  • Fundsmith now ranks 5th out of over 30 fund managers for value.
    67% of Fundsmith investors said they think the fund manager offers good value. This score ranks it 5th out of over 30 fund managers for value, up from 14th place on a 12-month rolling basis.

  • Baillie Gifford now ranks 10th out of over 30 fund managers for value.
    65% of Baillie Gifford fund investors said they think the fund manager offers good value. The fund manager now ranks in the top ten – a significant leap on its 12-month rolling ranking of 21st.            

Good performance for headline funds has seen Fundsmith and Baillie Gifford rise through the fund manager rankings for overall value, according to investors. They have stood out during a period of market turmoil, as active funds have returned to favour with investors who turned to passive as the volatility initially hit in March. UK investment platforms have listed Fundsmith and Baillie Gifford funds in the top ten most bought over the last few months.

 

Consistency is key

Returns are by far the most important factor for investors when assessing whether a fund manager offers good value. Along with consistency of returns, this is the most cited driver of value for asset managers.  

Returns are important, but they’re not the whole story

Relying on performance alone to drive perceptions of value is precarious, especially during times of volatility. What we see for the fund managers who consistently rank in the top ten for value, is the extent to which service-related factors drive perceived value. The larger bank and life company brands are less reliant on performance as a driver of value, with investors more frequently citing the quality of communications, transparency, ease of engagement and customer service.

Holly Mackay comments, “If we analyse investor responses, we can clearly see that there are different customer bases at a brand-specific level who value different things. Vanguard is almost exclusively a cost story. Fundsmith is largely a performance story. But being a ‘one trick pony’ is risky. Relying on performance alone is not optimal – Lindsell Train featured in our Top 10 consistently throughout 2019 but has fallen notably over current months.

“There is a significant cohort of investors who value peace of mind, brand strength and clarity of message above a single focus on performance and/or cost. It’s clear that value is not a single metric but is firmly in the eye of the beholder.”

-

Notes to editors

  • The research was conducted with 1,517 fund investors from 14 September to 4 October 2020.

  • Every quarter Boring Money tracks ownership, confidence, intentions, brand awareness and value perceptions with 1,500 fund investors.

  • Data is available for end-investor value perceptions at specific brand level going back to January 2019

  • Please contact Holly Mackay with any questions – 07984 609 827

 

About Boring Money

Boring Money is an independent research and content business which provides information, tips and Best Buys to consumers. The business conducts regular research with industry providers and consumers and looks at the developing DIY investment market from both the customer and provider perspective. Boring Money holds test accounts with over 25 providers and also holds regular focus groups and interviews with consumers to ensure regular input and feedback from the user perspective.

Founder Holly Mackay has worked in the investment industry for 20 years and is supported by a team of 12 researchers, analysts and marketing execs. Boring Money is not regulated to give personal financial advice, nor is it regulated by the industry watchdog.

Stay updated

Sign up to the Boring Money
business bulletin

Get monthly snippets of research,
industry developments and consumer feedback.
If you change your mind, you can unsubscribe at any time.