04
Jul
2019

Savers choose UK equity funds for the first time in over two years

Thursday 4 July 2019

The Investment Association (IA), the trade body that represents UK investment managers, has today published figures on how savers invested in May.   

  • Net retail sales experienced a second consecutive month of inflows, with savers placing £1.3 billion into funds.
  • UK equity funds were the best-selling region in May with net retail sales of £532 million.
  • Fixed income was the highest selling asset class for the third month in a row; net retail sales reached £771 million.
  • Tracker funds experienced their highest ever month of net retail sales with £2.3 billion inflows.

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

“UK equity funds saw a reversal of fortune in May, with savers placing £532 million into these funds in the first net inflows since April 2017. However, overall equity sales remain weak, with significant outflows from European equity funds and also Asian equity funds, in particular Japan, as the ripple effect of trade tensions between the US and China started to be felt. In contrast, mixed asset and bond funds attracted strong inflows.”    

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under Management

BEST SELLING INVESTMENT ASSOCIATION SECTORS  
 
The five best-selling Investment Association sectors for May 2019 were:

  1. Global was the best-selling sector with net retail sales of £562 million.
  2. £ Strategic Bond was second with net retail sales of £386 million.
  3. Mixed Investment 40-85% Shares was next with net retail sales of £367 million. 
  4. UK Equity Income followed with net retail sales of £316 million. 
  5. UK All Companies was fifth with net retail sales of £266 million. 

The worst-selling Investment Association sector in May 2019 was Targeted Absolute Return with an outflow of £505 million.

NET RETAIL SALES BY ASSET CLASS

Fixed Income was the best-selling asset class with £771 million in net retail sales.

Mixed Asset was the second best-selling asset class with net retail sales of £585 million.

Money Market was the third best-selling asset class with £306 million in net retail sales.

Property and Equity saw net retail outflows of £32 million and £78 million, respectively.  

Other (which includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors) saw net retail outflows of £209 million in May. 

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

UK funds were the best-selling in May with net retail sales of £532 million.

Global funds were the next best-selling with net retail sales of £282 million.

North America funds experienced net retail inflows of £172 million.

Asia funds saw net retail outflows of £46 million, followed by Japan funds which experienced net retail outflows of £256 million. 

Europe experienced net retail outflows of £527 million. 

TRACKER FUNDS

Tracker funds saw a net retail inflow of £2.3 billion. Tracker funds under management stood at £200 billion as of the end of May 2019. Their overall share of industry funds under management was 16.5%.

ETHICAL FUNDS

Ethical funds experienced net retail inflows of £174 million in May 2019. Funds under management were £18 billion at the end of May, representing a 1.5% share of industry funds under management.

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL

In May, gross retail sales for UK fund platforms totalled £10 billion, representing a market share of 42%.

Gross retail sales through Other Intermediaries including UK IFAs were £7 billion, representing a market share of 29%.

Direct gross retail sales in May were £1.5 billion, representing a market share of 6.3%.

-ENDS-
 

For further information, please contact:

For media, to receive the full consultation document, please contact Helen Ayres

Helen Ayres, Communications Manager: [email protected]

T +44 (0)20 7269 4620; M +44 (0)7508 724 066

David Parton, Communications Executive: [email protected]

T +44 (0)20 7831 0898

IA press office: [email protected]

Notes for Editors 

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:
 

Equity fund breakdown

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.

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 100,000 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 35% of all assets managed in Europe.