UK investors turn to global funds in the lead up to the US election
The Investment Association's monthly statistics of UK investor behaviour in October 2016 show:
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Equity outflows continue as investors look to mixed asset, money market and fixed income funds
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Targeted Absolute Return top-selling sector with net retail sales of £426 million
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Global equity, Global Emerging Markets and Global Bonds sectors make up three of the top five selling sectors
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Total net retail fund sales of £595 million
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Funds under management increased by over £20 billion in October
Chris Cummings, Chief Executive of the Investment Association, said:
"October saw the closing stages of the US election and the uncertainty surrounding the outcome led to cautious investing amongst UK investors. Net retail sales, however, were once again positive and industry funds under management increased further past the £1 trillion mark.
Alastair Wainwright, Fund Market Specialist, said:
"Investor caution was once again evident in October as retail sales flows focused on traditionally less risky areas of the market. Net sales into retail money market funds reached a record monthly high for the second time this year as advisers allocated their clients' money into cash.
"Targeted absolute return was once again the best-selling sector, however the remaining sectors in the top five had a global focus with Global equities, Global Emerging Markets and Global Bonds all featuring. This is a continuation of a trend we have seen all year as investors move away from country or strategy specific funds toward wider mandate funds, utilising fund managers' asset allocation skill.
"Mixed asset funds continued to benefit from regular savers with another positive monthly net retail flow; risk targeted fund ranges were the major beneficiary followed by the 40-85% Shares and 0-35% Shares sectors.
"Tracker funds continue to be popular with a monthly net retail inflow of £233 million. Interestingly the flows for passive strategies mirror that of the active funds market. Equity tracker funds saw an outflow of £154 million, whereas fixed income and multi-asset tracker funds received net retail inflows of £190 million and £159 million respectively. Not only did passive sales echo active in terms of asset class but also in terms of equity region, with global tracker funds the only equity region to see positive flows."
