03
Mar
2022

Fund outflows of £642m in January, as market uncertainty rises

Market uncertainty in January 2022 saw UK savers pull £642m out of retail funds, in the first such outflows since March 2020, the latest data published today by the Investment Association (IA) reveals.

Other key findings for January 2022 include:

  • Equity funds saw outflows of £1.3bn, driven in part by outflows of £1.6bn from UK equity funds and of £719m from North American equity funds, but offset slightly by inflows to Global funds.
  • Overall retail funds under management declined from £1.59trn to £1.51trn in January 2022 as a result of difficult market dynamics since the start of the year.
  • Money Market funds were the bestselling asset class in January with inflows of £820m, as investors turned to cash-like funds in anticipation of repositioning their portfolios.
  • Responsible investment funds saw reasonable net retail inflows of £743m despite challenging market conditions. Oil and gas stocks, which are typically excluded by responsible investment funds, have performed well.

Chris Cummings, Chief Executive of the Investment Association said:

“Rising inflation and market uncertainty cast a shadow over the start of the year in the fund market, with the first net retail outflows since the first national lockdowns in March 2020. Caution saw investors opt for diversified funds to help mitigate risks, and the strong sales to Short Term Money Market funds showed savers are waiting to see how markets will develop.

 “Events have moved quickly since January, and the Russian invasion of Ukraine has seen a negative reaction from markets. The crisis is deeply tragic for Ukraine’s citizens and investors have acted to show support and swiftly complied with the latest sanctions provisions.”

FUNDS UNDER MANAGEMENT AND NET SALES 

 

                                 

Funds Under Management  

Net Retail Sales  

Net Institutional Sales  

January 2022   

£1.5 trillion 

-£642 million 

-£3.9 billion 

January 2021 

£1.4 trillion 

£3.3 billion

-£1.8 billion 

BEST SELLING INVESTMENT ASSOCIATION SECTORS   

The five best-selling Investment Association sectors for January 2022 were: 

  

  1. Short Term Money Market with net retail sales of £838 million. 
  2. Global was second with net retail sales of £671 million. 
  3. Mixed Investment 40-85% Shares followed with net retail sales of £353 million. 
  4. Volatility Managed was fourth with net retail sales of £325 million. 
  5. Japan was fifth with £230 million. 
     

The worst-selling Investment Association sector in January 2022 was UK All Companies, which experienced outflows of £1.4 billion. 

NET RETAIL SALES BY ASSET CLASS 

Money Market funds was the best-selling asset class in January 2022, with £820 million in net retail sales. 

Mixed Asset funds was the second best-selling asset class, with £335 million of inflows. 

Property funds saw £12 million in outflows in January 2022.

Fixed Income was fourth with outflows of £76 million.  

Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £390m in outflows in January 2022.

Equity funds saw £1.3 billion of outflows.

NET RETAIL SALES OF EQUITY FUNDS BY REGION* 

Global was the best-selling equity fund region in January 2022, with net retail sales of £495 million,

Japan was second with net retail sales of £183 million. 

All other equity regions experienced outflows.

Asia funds saw £13 million in outflows, while Europe funds saw outflows of £136 million.

North America funds saw outflows of £719 million, and UK funds saw outflows of £1.6 billion.

TRACKER FUNDS 

Tracker funds saw a net retail inflow of £1.1 billion in January 2022. Tracker funds under management stood at £289 billion as of the end of January. Their overall share of industry funds under management was 19.1%. 

RESPONSIBLE INVESTMENT FUNDS 

Responsible investment funds saw a net retail inflow of £743 million in January 2022. Responsible investment funds under management stood at £84 billion as of the end of January. Their overall share of industry funds under management was 5.5%. 

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL 

In January, gross retail sales for UK fund platforms totalled £11.3 billion, representing a market share of 47.1%.  

Gross retail sales through Other UK Intermediaries including IFAs were £7.6 billion, representing a market share of 31.7%.  

Direct gross retail sales in December were £815 million, representing a market share of 3.4%.  

 

 

Notes for Editors: 

This data includes the six new sectors launched from the Investment Association’s (IA) Global and Specialist sectors on Monday 13 September 2021. 

Currently, the two sectors are among the largest within the classification scheme, with 471 funds included within the IA Global sector and 332 in the IA Specialist sector. As the retail fund market evolves and grows, the creation of the new sectors will help investors to more easily find similar types of funds. The decision to create the new sectors was taken by the IA Sectors Committee after a public consultation with the industry and sector users.  

New country - regional equity sectors:  

  • Latin America
  • India/Indian Subcontinent

Industry sectors: 

  • Financials and Financial Innovation
  • Healthcare

Alternative investment approaches: 

  • Infrastructure
  • Commodity/Natural Resources

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: 

Asia: Asia Pacific excl. Japan; Asia Pacific incl. Japan; China/Greater China; India/Indian Subcontinent

Europe: Europe excl. UK; Europe incl. UK; Europe Smaller Companies

Global: Global; Global Emerging Markets; Global Equity Income; Specialist; Healthcare; Technology and Techology innovation; Financials and Financial innovation

Japan: Japan; Japanese Smaller Companies

North America: North America; North America Smaller Companies

UK: UK All Companies; UK Equity Income; UK Smaller Companies

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, Quilter, 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

About the Investment Association (IA):

  • The IA champions UK investment management, supporting British savers, investors and businesses. Our 270 members manage £9.4 trillion of assets and the investment management industry supports 114,000 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 over a third (37%) of all assets managed in Europe.