Funds hit by £4.5 billion in outflows amidst intensifying economic uncertainty
UK savers took £4.5 billion out of funds in June 2022, the highest monthly outflow of the year so far and the second highest on record, according to data published today by the Investment Association (IA). Investors responded to intensifying economic uncertainty following a challenging first half of the year for market performance.
Other key findings for June 2022 include:
- Equity funds saw outflows of £2.3 billion, largely coming out of globally diversified equity funds, which experienced outflows of £1.3 billion, marking the biggest outflow since the aftermath of the 2016 Brexit referendum vote.
- Mixed Asset funds also saw outflows of £268 million, while Tracker funds saw net retail outflows of £41 million this month, only the second outflow in a decade, reflecting ongoing uncertainty in market conditions.
- Volatility Managed was the bestselling IA sector in June, with net retail inflows of £248 million, as investors looked to investment managers to help them manage the volatility of their returns. Global Equity Income was the second highest selling sector with net retail sales of £189 million.
- Responsible investment funds remained in inflow, with net retail sales of £71 million in June 2022, down from last month’s £1.6 billion.
Chris Cummings, Chief Executive of the Investment Association, said:
“Savers are pre-empting slowing economic growth and preparing for further interest rates rises as we enter new territory for markets. Higher rates mean a weaker performance outlook for the high-growth companies that helped to fuel the bull market of the last decade. This month’s equity fund outflows indicate that investors are looking at ways to better balance their savings.
“All major asset classes experienced outflows in June as investors continue to adjust to the end of the low interest rate era. Investors turned to lower-risk asset classes as a bulwark against rising market uncertainty, and UK Gilts sold well.
“While the current market environment presents challenges, it is more important than ever for investors to maintain a long-term view of their investments in order to realise their savings goals. By demonstrating our industry’s skill and resilience, investment managers can guide investors through unchartered waters.”
FUNDS UNDER MANAGEMENT AND NET SALES
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Funds Under Management |
Net Retail Sales |
Net Institutional Sales |
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June 2022 |
£1.4 trillion |
-£4.5 billion |
-£2.5 billion |
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June 2021 |
£1.5 trillion |
£4.3 billion |
£275 million |
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for June 2022 were:
- Volatility Managed with net retail sales of £248 million.
- Global Equity Income was second with net retail sales of £189 million.
- Mixed Investment 40-85% Shares followed with net retail sales of £112 million.
- UK Gilts was fourth with net retail sales of £108 million.
- Infrastructure was fifth again this month with £99 million.
The worst-selling Investment Association sector in June 2022 was Short Term Money Market, which experienced outflows of £810 million.
NET RETAIL SALES BY ASSET CLASS
All asset classes experienced outflows in June 2022.
Property funds experienced £9 million of outflows.
Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £185 million of outflows.
Mixed Asset funds saw outflows of £268 million.
Fixed Income funds saw outflows of £653 million.
Money Market had outflows of £1.1 billion.
Equity funds saw outflows of £2.3 billion.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
Japan was the best-selling equity fund region in June 2022, with net retail sales of £15 million.
All other equity regions experienced outflows.
North America funds saw net retail outflows of £12 million.
Asia funds saw outflows of £272 million.
Europe funds saw outflows of £445 million, while UK funds saw outflows of £690 million.
Global funds saw outflows of 1.3 billion.
TRACKER FUNDS
Tracker funds saw net retail outflows of £41 million in June 2022. Tracker funds under management stood at £277 billion at the end of June. Their overall share of industry funds under management was 20%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail inflow of £71 million in June 2022. Responsible investment funds under management stood at £84 billion at the end of June. Their overall share of industry funds under management was 6.1%
GROSS RETAIL SALES BY DISTRIBUTION CHANNEL
Gross retail sales for UK fund platforms totalled £12 billion, representing a market share of 52.4%.
Gross retail sales through other UK Intermediaries including IFAs totalled £6 billion, representing a market share of 26.8%.
Direct gross retail sales totalled £932 million, representing a market share of 4.0%.
In June, Execution only intermediaries totalled £190 million in gross retail sales and accounted for 0.8% of the market.
ENDS
For further information, please contact:
Arianna Schardt, Communications Executive: [email protected]
T: +44 (0)20 7269 4625
Katie Martin, Head of Communications: [email protected]
T: +44 (0)20 7269 4625
IA press office: [email protected]
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:
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Asia |
Europe |
Global |
Japan |
North America |
UK |
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Asia Pacific excl. Japan |
Europe excl. UK |
Global |
Japan |
North America |
UK All Companies |
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Asia Pacific incl. Japan |
Europe incl. UK |
Global Emerging Markets |
Japanese Smaller Companies |
North America Smaller Companies |
UK Equity Income |
|
China/Greater China |
Europe Smaller Companies |
Global Equity Income |
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UK Smaller Companies |
|
India/Indian Subcontinent |
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Specialist |
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Healthcare |
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Technology and Technology innovation |
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Financials and Financial innovation |
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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.
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.
