Panellists’ preference for American over British equities was most noticeable in the Balanced index, during the May Adviser Fund Index rebalancing.
Exposure to British stocks fell by six percentage points to just 34 per cent. The move allowed the panel of 19 to increase its American equity allocation by half, from 6 per cent to 9 per cent.
Part of this rise came from the addition of two new American funds – M&G American and BlackRock US dynamic, which were chosen by one and two panellists respectively.
However, there were also increased allocations for previously selected funds and Tom Walker’s Martin Currie North American portfolio, chosen by three advisers, remains the most popular American fund in the Balanced index.
The total number of selections for the fund was down from four last November but the £360m portfolio was given a bigger overall weighting in May.
This helped offset the removal of Old Mutual North American equity, Threadneedle American select and UBS US 130/30 equity, all of which were ejected by single advisers in both the Balanced and Aggressive indices.
The British allocation was hit by the departure of several previously popular funds. According to Financial Express, four of the five highest-ranked funds ejected are focused on British equities – BlackRock UK, Investec UK special situations, Neptune UK equity and Norwich UK special situations. All four funds were also removed from the Aggressive index.
The allocation to property funds continued its decline, following one and two percentage point reductions in 2007.
Norwich property and Schroder global property securities were ejected from the index in May, by one and two panellists respectively.
M&G’s £900m property portfolio also fell out of favour with two advisers but retained its place in the index with one selection. Property exposure was boosted slightly by the arrival of Insight’s £340m diversified target return fund.
The multi-asset Insight portfolio, which originally joined the AFI in November 2006 before being ejected 12 months later, had a 6 per cent property weighting in April.
Its selection ended Insight’s six-month absence from the AFI. Lazard, which lost four funds last November, also rejoined the AFI after its £380m emerging markets portfolio was chosen for the Aggressive, Balanced and Cautious indices by single advisers.
The Balanced index’s property allocation fell by one percentage point but its fixed income weighting rose by the same amount.
Baring directional global bond, Invesco Perpetual global bond, L&G dynamic bond, M&G optimal income and New Star high-yield bond were among the new arrivals.
However, several bond funds left the benchmark after they were removed by one adviser. Aegon Global Bond lost the support of two panellists, but remained in the index thanks to one selection.
There were 23 new additions to the Balanced AFI overall, with 28 ejections causing the total number of constituents to fall from 115 to 110.