Active funds win in drawdown assets race

The first wave of drawdown customers post pension freedoms are backing active managers, figures from Hargreaves Lansdown show.

An analysis of the investment preferences of Hargreaves investors who opened drawdown contracts after 6 April shows just £1 in every £20 went into passive funds.

UK equity income was the most popular fund sector, accounting for 27.55 per cent of all drawdown assets, while Lloyds Banking Group was the most popular individual stock. Shares in the bank are equal to 4.5 per cent of drawdown portfolios.

GlaxoSmithKline and Vodafone both account for 4 per cent of investments.

Hargreaves senior analyst Laith Khalaf says: “What is particularly striking is there is clearly an appetite for growth, as well as income, which suggests investors are saving some of their jam for tomorrow, as well as using their pension pot to produce an income today.

“Passive funds are not yet well represented amongst drawdown investors, which reflects the current dearth of income-orientated passive funds on the market. In time this may change as providers bring new products to the market to fill the passive pension gap.”

Top 10 most popular funds of Hargreaves drawdown customers, listed alphabetically

Hargreaves most popular funds

Most popular fund sectors

Hargreaves fund sectors