Outflows rise ahead of challenging autumn forecast
UK savers took £2.6 billion out of funds in August 2022, in the seventh month of net retail outflows this year, according to data published today by the Investment Association (IA). This takes outflows for 2022 to £14.6 billion.
Other key findings for August 2022 include:
- Equity funds experienced almost £3 billion of outflows, the highest monthly outflow on record, driven by outflows from UK equities of £1 billion and from Global equities of £828 million.
- Bond funds experienced inflows of just over £1 billion. The £ Strategic Bond was the best-selling sector with inflows of £288 million.
- Responsible investment funds saw modest inflows of £109 million.
- Tracker fund inflows experienced inflows of £412 million, the second weakest inflow of the year. Tracker funds have only seen one monthly outflow in 2022.
Chris Cummings, Chief Executive of the Investment Association, said:
“While August is traditionally a quieter month for fund sales, political and economic uncertainty continued to leave savers navigating challenging market dynamics. Bond funds saw inflows, but in most IA sectors, sales have weakened or turned to outflow. Outflows from equity funds rose as the outlook for economic growth globally continued to slow, taking total outflows from funds to £2.6 billion compared with the modest -£129 million in July.
“UK households are heading into a challenging autumn and winter and grappling with a cost-of-living crisis, which may have an impact on their ability to put money aside. With market dynamics in a state of flux, we could see investors react to the surging yield on gilts and UK corporate bonds, or bide their time until we see a period of relative calm.”
FUNDS UNDER MANAGEMENT AND NET SALES
|
|
Funds Under Management |
Net Retail Sales |
Net Institutional Sales |
|
August 2022 |
£1.4 trillion |
-£2.6 billion |
-£39 million |
|
August 2021 |
£1.6 trillion |
£5.3 billion |
£249 million |
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for August 2022 were:
- £ Strategic Bond with net retail sales of £288 million.
- Infrastructure was second with net retail sales of £205 million.
- Mixed Bond followed with net retail sales of £205 million.
- Volatility Managed was fourth this month with net retail sales of £194 million.
- Corporate Bond was fifth with net retail sales of £172 million.
The worst-selling Investment Association sector in August 2022 was UK All Companies, which experienced outflows of £772 million.
NET RETAIL SALES BY ASSET CLASS
Fixed Income funds saw inflows of £1.0 billion.
Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £449 million of inflows.
Mixed Asset funds saw inflows of £102 million.
Property funds experienced £199 million of outflows.
Money Market turned to outflows, at £990 million.
Equity funds saw outflows of £2.9 billion.
NET RETAIL SALES OF EQUITY FUNDS BY REGION
All equity regions experienced outflows this month.
Japan saw outflows of £46 million.
Asia funds saw outflows of £154 million.
Europe funds saw outflows of £564 million.
North America funds saw net retail outflows of £505 million.
Global funds saw outflows of £828 million.
UK funds saw outflows of £1 billion.
TRACKER FUNDS
Tracker funds saw net retail inflows of £412 million in August 2022. Tracker funds under management stood at £288 billion at the end of August. Their overall share of industry funds under management was 20%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail inflow of £109 million in August 2022. Responsible investment funds under management stood at £90 billion at the end of August. Their overall share of industry funds under management was 6.4%.
GROSS RETAIL SALES BY DISTRIBUTION CHANNEL
Gross retail sales for UK fund platforms totalled £12.8 billion, representing a market share of 54.1%.
Gross retail sales through other UK Intermediaries including IFAs totalled £5.9 billion, representing a market share of 25.2%.
Direct gross retail sales totalled £994 million, representing a market share of 4.2%.
In August, Execution only intermediaries totalled £102 million in gross retail sales and accounted for 0.4% 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:
|
Asia |
Europe |
Global |
Japan |
North America |
UK |
|
Asia Pacific excl. Japan |
Europe excl. UK |
Global |
Japan |
North America |
UK All Companies |
|
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 |
|
|
UK Smaller Companies |
|
India/Indian Subcontinent |
|
Specialist |
|
|
|
|
|
|
Healthcare |
|
|
|
|
|
|
Technology and Technology innovation |
|
|
|
|
|
|
Financials and Financial innovation |
|
|
|
|
|
|
|
|
|
|
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 250 members manage £10 trillion of assets and the investment management industry supports 122,000 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.
