Demand for bonds boost fund sales to £2.5 billion
Thursday 5 December 2019
UK savers invested £2.5 billion in funds in October, with a return to equity fund inflows following record outflows in Q3, according to latest figures published today by the Investment Association (IA).
- UK savers invested £2.5 billion into funds in October, with £1.3 billion invested into bond funds.
- Equity funds bounced back with inflows of £648 million in October, after outflows of £1.7 billion in September.
- Tracker funds experienced net retail inflows of £1.8 billion in October, making up over two thirds of all net retail sales that month.
Chris Cummings, Chief Executive of the Investment Association, said:
“Savers poured £2.5 billion into the UK fund market in healthy October sales figures. Half of this was invested into bond funds in stark contrast to the significant outflows of £1.7 billion in ‘red October’ 2018.
“Following a tough third quarter of record outflows, equities experienced a modest revival with savers investing £648 million. As a year of political and economic uncertainty draws to a close, savers are considering all their options, with mixed asset, equities, and bonds seeing inflows in October.”
FUNDS UNDER MANAGEMENT AND NET SALES
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for October 2019 were:
- £ Strategic Bond was first with net retail sales of £423 million.
- North America was second with net retail sales of £317 million.
- Mixed Investment 40-85% Shares followed with net retail sales of £311 million.
- Volatility Managed was fourth with net retail sales of £286 million.
- Short Term Money Market was fifth with net retail sales of £237 million.
The worst-selling Investment Association sector in October 2019 was Targeted Absolute Return with an outflow of £566 million.
NET RETAIL SALES BY ASSET CLASS
Fixed Income was the best-selling asset class in October 2019 with £1.3 billion in net retail sales.
Equity was the second best-selling asset class with £648 million of inflows.
Mixed Asset was the third best-selling asset class with £482 million in net retail sales.
Money Market was the next best-selling asset class with £280 million in net retail sales.
All other asset classes experienced outflows in October 2019, with Property experiencing outflows of £133 million, and Other (which includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors) experiencing net retail outflows of £156 million.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
North America was the best selling equity fund region in October 2019, with net retail sales of £308 million.
Global funds was the second best selling with net retail sales of £219 million.
Asia funds saw net retail sales of £139 million in October.
All the other equity regions experienced outflows.
UK funds experienced net retail outflows of £7 million, while Japan funds experienced net retail outflows of £47 million.
And Europe funds experienced net retail outflows of £312 million.
Tracker funds saw a net retail inflow of £1.8 billion in October 2019. Tracker funds under management stood at £218 billion as of the end of October. Their overall share of industry funds under management was 17%.
RESPONSIBLE INVESTMENT FUNDS
Responsible Investment funds saw a net retail inflow of £467 million in October 2019. Responsible Investment funds under management stood at £25 billion as of the end of October. Their overall share of industry funds under management was 2.0%.
This is the first month the IA has published data on Responsible Investment funds, based on the Global Sustainable Investment Alliance (GSIA) definitions. This data has been backdated to January 2019. Our former Ethical fund data is not directly comparable to the new data and so has not been included in this month’s tables.
GROSS RETAIL SALES BY DISTRIBUTION CHANNEL
In October, gross retail sales for UK fund platforms totalled £11.3 billion, representing a market share of 51%.
Gross retail sales through Other UK Intermediaries including IFAs were £6 billion, representing a market share of 25%.
Direct gross retail sales in October were £1.5 billion, representing a market share of 7%.
For further information, please contact:
Katie Martin, Head of Communications: [email protected]
T: +44 (0)20 7269 4655
Helen Ayres, Communications Manager: [email protected]
T: +44 (0)20 7269 4620
David Parton, Communications Executive: [email protected]
T: +44 (0)20 7269 4625
IA press office: [email protected]
T: 020 7269 4696
Notes for editors:
To see a breakdown of the data referenced in this press release, please see all of the tables here.
The Investment Association's figures for fund sales cover retail and institutional sales in authorised unit trusts and open ended investment companies (OEICs) provided by our membership to UK investors. The figures do not include investment trusts and ETFs.
Each month small revisions to figures have been made since the previous press release. This reflects additional information received by The Investment Association.
Net retail sales comprise total retail sales minus repurchases (including switches between funds), thus the figures can result in a negative figure or outflow.
* Regional breakdown for equity funds
The following Investment Association sectors have been grouped together to compile the figures for regional equity sales:
Direct includes sales forces and tied agents, private clients and other direct to investor sales without intermediation.
** The Investment Association’s ISA figures are based on information collected from fund companies and five fund platforms (AEGON, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) where they are the ISA provider. Fund business through other ISA providers such as wealth managers is not included. The Investment Association’s figures cover about three-quarters of the whole of the market for funds held in ISAs.
About the Investment Association (IA):
- The IA champions UK asset management, supporting British savers, investors and businesses. Our 250 members manage £7.7 trillion of assets and the asset management industry supports 115,000 jobs across the UK.
- Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.
- Our purpose is to ensure investment managers are in the best possible position to:
- Build people’s resilience to financial adversity
- Help people achieve their financial aspirations
- Enable people to maintain a decent standard of living as they grow older
- Contribute to economic growth through the efficient allocation of capital.
- The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
- The UK is the second largest investment management centre in the world, after the US and manages 37% of all assets managed in Europe.