Lindsell Train UK Equity slipped out of the ten most commonly held funds by multi-managers in Q3 as the Woodford effect began to hit sentiment towards some of the most popular boutique houses, according to Harrington Cooper's Proprietary Asset Allocation Tracker.
Despite equity allocations within balanced portfolios run by UK wholesale investors ticking modestly higher in the third quarter of 2019, Nick Train's popular offering was shunned.
The fund, which has lost 1.1% in the three months to 27 November compared to the FTSE All-Share's 6.2% gain according to FE Fundinfo, had been a stalwart of multi-manager portfolios, said Jonathan Francis, head of investment research at Harrington Cooper.
However, Francis suggested its departure from the most commonly held funds list "perhaps indicates a degree of increased caution around the most commonly held boutiques, following the issues surrounding Woodford Investment Management".
In July, investment platform Hargreaves Lansdown also announced it had removed the fund, along with its Global Equity stablemate, from its influential Wealth 50 list.
Overall, Harrington Cooper's research showed multi-managers put cash to work at the fastest quarterly pace since December 2016 in the third quarter of 2019 with fixed income allocations hitting record highs.
The average cash holding fell by 1.3% during Q3 to 6.5% as market confidence returned amid signs of an improvement in trade relations between the US and China and confirmation of a general election in the UK.
It was the largest quarterly drop in cash allocation since Q4 2016, with income-focused portfolios seeing a 3% decrease in cash holdings and falling to the lowest level since March 2016.
That cash in balanced portfolios was put to work largely within fixed income, which saw an increase of 1.0% to a record high of 24.7%.
The allocation was focused on safer areas of the market, including investment grade bonds and gilts, which rose by 1.35% and 0.47% respectively. However, allocation to sovereign bonds fell to their lowest levels on record.
Similarly, income-seeking mandates increased their collective allocation to bonds to a high level at 42.49%, up 2.59% from Q2.
"The entrance of funds such as GAM Star MBS Total Return, Royal London Short Duration High Yield Bond, Nordea Low Duration European Covered Bond and iShares Overseas Corporate Bond suggests that investors are continuing to hunt for higher-yielding areas of the market that offer some degree of safety," said Francis.
Equity funds also saw a modest increase in allocation in balanced multi-manager portfolios, with a 0.24% increase to 55.82%, but income-oriented multi-managers decreased their exposure to stocks by 0.27% to 43.31%.
US equities now account for their largest weighting in balanced funds since January 2014 at 10.7%, with global equities also rising to 9.1%.
Elsewhere, alternative UCITS remained out of favour, with allocations falling 0.8% to an average exposure of 7.7%, a historic low. Property also saw a lower level of investment, with allocation falling 0.4% on the back of a particular aversion to
Francis said: "The uncertainty around Brexit and a potential election are likely to have increased the focus on these funds. Investors are likely remaining cautious of the potential liquidity mismatches in these funds."
Harrington Cooper's research tool tracked the allocation of 30 balanced risk multi-manager funds and 13 income-focused multi-manager funds, which account for total assets of £15bn, over the course of the three months to the end of September.