Passive funds dominate top 10 most-held funds list

Only two active funds feature in the top 10 most-held funds in managed portfolios, reflecting the dominance of passive and blended approaches, according to Morningstar’s data.

Morningstar has released a new data set evaluating the UK’s managed portfolio landscape, incorporating data on the most-held funds and top performers over one, three, and five-year periods. This expanded dataset includes an additional 140 portfolios from new and existing providers, with recent additions including Abrdn, Barras Capital, M&G, and Meon, and more providers in the onboarding process.

Tom Mills, Analyst at Morningstar, noted that only two active funds feature in the top 10 most-held funds in managed portfolios, reflecting the prevalence of passive and blended approaches. “ETFs with socially responsible investment or ESG policies again prominently feature in the list of the 10 most-held ETFs,” Mills added, highlighting a shift towards equities and bonds over previous preferences like gold-tracking ETPs.

Reviewing five-year returns to the end of April 2024, there is no clear winner between active, passive, and blended approaches, noted Mills, adding that large blend equity style is the most common among top-performing portfolios, aligning with the composition of over three-quarters of the managed portfolios in the database.