The Investment Week study found that five funds had over £3bn in outflows over the year, with a further five recording a fall in excess of £2bn. Credit: iStock
The flagship fund of star manager Terry Smith suffered some of the biggest declines in assets under management in 2024, amid a turbulent year for markets, according to an Investment Week analysis.
In a study looking into the top and bottom 20 open-ended funds in 2024 in terms of net AUM changes, Fundsmith saw £3.31bn in outflows between 31 December 2023 and 31 December 2024, according to data provided by Morningstar Direct.
It is worth noting that the change in total net assets can be influenced by various factors beyond just net flows. Market appreciation or depreciation, as well as distributions, can significantly impact change in total net assets across all funds.
For Fundsmith, even though its year-end AUM was a way off its recent £26bn peak recorded in April 2022, it is still the tenth-largest fund on the market, according to FE fundinfo data.
Smith's mandate has been a stalwart of the equity investment space for years, with a legacy of delivering outperformance over the long-term. Indeed, it returned 261.6% over the past decade, as of the end of January 2025.
Fundsmith sells out of PepsiCo while making unnamed investment
But some of the shine was evidently lost last year, and indeed on several occasions the strategy fell out of the top ten most popular buys for retail platforms.
Its manager and namesake runs a ‘buy and hold' approach, with any assets in the fund having been there since inception.
But spilling over from last year into 2025, Smith has been making several changes, with Investment Week reporting it had sold out of PepsiCo back in January, after holding it for over a decade.
The fund was pipped by BlackRock's Coutts UK ESG Insights Equity strategy as the active fund with the highest overall outflows for 2024, however.
Sitting at £226.4m AUM at the end of 2024, the ESG Insights fund saw almost £4bn exit over the course of the year (although its starting AUM was not available according to Morningstar).
A UK large-cap equity fund run by Jonathan Adams and Suzanne Ly, the strategy missed its return target in 2024, by almost 2%, according to BlackRock's data, making just 8% versus 9.7% from the MSCI UK ESG Screened Select benchmark.
Three Aviva Investors funds red-flagged over underperformance
The study found that five funds had over £3bn in outflows over the year, with a further five recording a fall in excess of £2bn.
There were a plethora of trackers on the list, including the iShares MSCI USA SRI UCITS ETF (-£3.64bn AUM), Global Aggregate Bond Index Sub-fund (-£3.04bn), Amundi Index Solutions - Amundi S&P 500 UCITS ETF (-£1.86bn) and L&G US ESG Exclusions Paris Aligned UCITS ETF (-£1.69bn).
Inflows
On the other side, the funds taking in the most money last year were a mix of US and global large-caps, along with flexible and government bond funds.
The ‘winner' overall though was the PIMCO GIS Income fund, which enjoyed £16bn in inflows during the period, with its AUM jumping from £55.32bn to £71.29bn during the time.
Morningstar reported in October that it – along with Fundsmith – was one of the most viewed funds on its platform, at a point when its AUM was £66.5bn.
The strategy is currently the third-largest on the market, according to FE fundinfo data, and across the year made 5.2%, besting the IA Sterling Strategic Bond sector average (4.6%) and the Bloomberg Barclays US Aggregate Bond index (0.8%).
Friday Briefing: And the exodus continues?
It was one of three funds taking in over £10bn last year, but it was the only active mandate to achieve this feat.
The others were the iShares Core S&P 500 UCITS ETF and iShares Core MSCI World UCITS ETF, taking in £15.24bn and £12.56bn, respectively.
Indeed, most of the funds on this ‘Top 20' list were passives, as investors opted for cheaper mandates to achieve returns in a narrowing market.
The next active fund recording high inflows was Kieran Doyle's Blackrock ACS North America ESG Insights Equity, which took in £8.58bn.
This saw its AUM increase almost five-fold across the period, the largest individual increase off all the funds in the study.
