Equities firmly out of favour with record quarterly outflows

Thursday 7 November 2019

Savers invested £350m in UK funds in September, but money flowed out of equity funds at a record level, according to latest figures from the Investment Association (IA), the trade body representing UK investment managers.

• Net retail sales were positive in September, with £351 million of inflows into UK funds. 
• Equity funds saw £1.7 billion of outflows in September, the fourth consecutive month of outflows. Q3 2019 saw the largest net retail outflows on record from Equity funds at £4.6 billion.
• UK equity funds saw net retail outflows of £676 million in September 2019, with record outflows in Q3 totalling £2.3 billion.  
• Tracker funds experienced net retail inflows across all asset classes of £4.6 billion in Q3 2019.

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

“Global uncertainty cast a long shadow over stocks and shares in the last quarter, as savers pulled a record £4.6 billion from equity funds. Savers particularly shied away from UK equities with £2.3 billion of outflows in the same period.

“Bond funds benefited as investors looked for a port in the storm, with Mixed Asset funds also providing relief. Bond and Mixed Asset funds each experienced inflows of £2.2 billion in the last quarter, as investors continued to diversify their portfolios.”  

FUNDS UNDER MANAGEMENT AND NET SALES

BEST SELLING INVESTMENT ASSOCIATION SECTORS  
 
The five best-selling Investment Association sectors for September 2019 were:
 
1.    £ Strategic Bond was first with net retail sales of £721 million.

2.    Mixed Investments 40-85% Shares was second with net retail sales of £347 million. 

3.    Global Bonds followed with net retail sales of £315 million. 

4.    Global Emerging Markets was fourth with net retail sales of £270 million. 

5.    Global Emerging Markets Bond was fifth with net retail sales of £268 million. 

The worst-selling Investment Association sector in September 2019 was £ Corporate Bond with an outflow of £917 million.

NET RETAIL SALES BY ASSET CLASS

Mixed Asset was the best-selling asset class in September 2019 with £845 million in net retail sales.

Fixed Income was the second best-selling asset class with £794 million of inflows. 

Money Market was the third best-selling asset class with £385 million in net retail sales. 

Other (which includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors) also experienced net retail sales of £100 million.

All other asset classes experienced outflows in September 2019, with Property experiencing net retail outflows of £82 million, and Equity experiencing net retail outflows of £1.7 billion.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

All equity fund regions experienced outflows in September 2019.

North America funds saw the smallest net retail outflows of £75 million.

Asia funds saw net retail outflows of £154 million in September.

Global funds experienced net retail outflows of £226 million.

Japan funds saw net retail outflows of £254 million, followed by Europe funds which experienced net retail outflows of £290 million.

UK funds experienced net retail outflows of £676 million. 

TRACKER FUNDS

Tracker funds saw a net retail inflow of £1.5 billion in September 2019. Tracker funds under management stood at £220 billion as of the end of September. Their overall share of industry funds under management was 17%.

ETHICAL FUNDS

Ethical funds saw a net retail inflow of £274 million in September 2019. Ethical funds under management stood at £21 billion as of the end of September. Their overall share of industry funds under management was 1.6%.

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL

In September, gross retail sales for UK fund platforms totalled £10 billion, representing a market share of 48%.

Gross retail sales through Other UK Intermediaries including IFAs were £6 billion, representing a market share of 28%.

Direct gross retail sales in September were £1.3 billion, representing a market share of 6%.

 

- ENDS - 

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 Channels

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.