UK Investors continue to favour European & Global Equity Funds

Posted On: 
5th October 2017

Net retail sales were £3.6 billion, the highest selling August on record.

The Investment Association's monthly statistics of UK investor behaviour in August 2017 show:

  • Funds under management grew to almost £1.2 trillion 
  • Equity funds were the best-selling asset class in August with £1.1 billion in net retail sales

Chris Cummings, Chief Executive of the Investment Association, said: 

"Investor confidence in the UK fund industry continued in August with yet another record breaking month of inflows, net retail sales were £3.6 billion, the highest selling August on record. Funds under management also grew to almost £1.2 trillion."

Alastair Wainwright, Fund Market Specialist, said: 

"Equity funds were the best-selling asset class in August with £1.1 billion in net retail sales. Once again we saw UK investors looking abroad as Europe ex UK and Global equity were the top selling sectors with net retail sales of £507 million and £347 million, respectively. So far in 2017 UK focused strategies have seen a net retail outflow of £1.4 billion whilst non-UK equity funds have received £7.9 billion in new retail money.

"£ Strategic Bond was the third best-selling sector with £333 million. Fixed income funds attracted £993 million in total as £ Corporate Bond and Global bond funds also proved to be popular with investors. 

"Mixed Investment funds were as popular as ever, the Mixed Investment 20-60% Shares and 40-85% Shares sectors were fourth and fifth best-selling sector with £253 million and £232 million in net retail sales respectively."

ASSET CLASSES

Equity was the best-selling asset class in August 2017, with net retail sales of £1.1 billion.

Mixed Asset was the second best-selling with net retail sales of £1.1 billion.

Fixed Income was the third best-selling asset class with net retail sales of £993 million.

Money Market funds saw inflows of £416 million. 

Many property funds in the IA universe are structured as Master-Feeder. The IA excludes feeder funds from its data as this leads to double counting of sales and assets in aggregated data. Due to the restructuring of a fund from a Trust to a Master-Feeder structure in August it appears that there was a large outflow from the Property sector. This is not the case, the assets remain in the sector but have been allocated to the Feeder fund, which does not feature in our dataset.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

European equity funds were the best-selling in August with net retail sales of £551 million.

Global equity funds were the second best-selling with net retail sales of £469 million.

North American equity funds were the third best-selling with net retail sales of £218 million.

UK funds experienced outflows of £167 million.

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

The five best-selling Investment Association sectors for August 2017 were:

  1. Europe Excluding UK was the best-selling sector with net retail sales of £507 million.
  2. Global with net retail sales of £347 million.
  3. £ Strategic Bond with net retail sales of £333 million.
  4. Mixed Investment 20-60% Shares with net retail sales of £253 million.
  5. Mixed Investment 40-85% Shares with net retail sales of £232 million.

The worst-selling Investment Association sector in August 2017 was the UK Equity Income with an outflow of £165 million. 

RETAIL DISTRIBUTION

In August, gross retail sales for UK fund platforms totalled £8.6 billion, representing a market share of 43.9% (43.4% in August 2016).

Other Intermediaries including UK IFAs and Wealth Managers attracted gross retail sales of £4.5 billion, representing a market share of 23.1% (23.6% in August 2016).

Direct gross retail sales in August were £1.5 billion, representing a market share of 7.9% (9.9% in August 2016).

FUND PLATFORM PRODUCT SALES

For the five fund platforms that provide data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) we saw net retail sales of £1.3 billion in August.

Personal Pensions had net sales of £795 million, ISAs £194 million, and Unwrapped £303 million, and Insurance Bonds £43 million.

For the same five fund platforms, funds under management as at the end of August 2017 were £251 billion, compared with £218 billion a year earlier.

ISAs

In August 2017, funds in ISAs provided by fund companies and the five fund platforms that feed data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) saw net retail inflows of £17 million.

The three best-selling sectors for ISAs based on the five fund platforms were:

  1. Global (£40 million net sales)
  2. Mixed Investment 20-60% Shares (£37 million net sales)
  3. Mixed Investment 40-85% Shares (£24 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £873 million in August 2017.

Funds of funds that invested externally saw net retail sales of £436 million, while funds that invested internally saw net retail sales of £437 million.

Funds under management for funds of funds were £146 billion at the end of August 2017, accounting for 12.7% of industry funds under management, compared with 11.9% in August 2016.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £790 million. Tracker funds under management stood at £159 billion as at the end of August 2017. Their overall share of industry funds under management was 13.7%, compared with 12.8% in August 2016.

ETHICAL FUNDS

Net retail sales of ethical funds were £155 million in August 2017. Funds under management were £14 billion at the end of August, representing a 1.3% share of industry funds under management.