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 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 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 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.
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
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.