Savers go Global, as diversification grows in October
Thursday 3 December 2020
UK savers prioritised diversification as Global (equity) and Global Bonds became the top two best-selling IA sectors respectively in October 2020, according to latest figures published today by the Investment Association (IA). The other key findings:
- Responsible investment funds continued to attract healthy net retail sales, reaching £1 billion in October for the first time in a month.
- Overall net retail sales reached £2.5 billion in October 2020, in another strong month of inflows.
- Mixed asset funds became the best-selling asset class for the first time since February 2020, with net sales of £1.2 billion in October.
- The UK Equity Income sector experienced a record net retail outflow of £644 million in October.
Chris Cummings, Chief Executive of the Investment Association, said:
“As a second wave of COVID-19 infections became more apparent in October, savers looked to diversify their portfolios by backing global stocks and bonds in an effort to weather the storm. Investors also opted for the relative safety of UK gilts.
“Despite growing COVID-19 uncertainty in October, it is encouraging that savers continued to put their money in funds as net retail sales reached a strong £2.5 billion, buoyed in large parts by consistently strong sales into responsible investment funds.”
FUNDS UNDER MANAGEMENT AND NET SALES
|Funds Under Management||Net Retail Sales||Net Institutional Sales|
|October 2020||£1.3 trillion||£2.5 billion||-£8.4 billion|
|October 2019||£1.3 trillion||-£22 million||-£489 million|
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for October 2020 were:
- Global was first with net retail sales of £869 million.
- Global Bonds was second with net retail sales of £793 million.
- Mixed Investment 40-85% Shares followed with net retail sales of £569 million.
- UK Gilts was fourth with net retail sales of £366 million.
- Volatility Managed was fifth with net retail sales of £251 million.
The worst-selling Investment Association sector in October 2020 was UK Equity Income with an outflow of £644 million.
NET RETAIL SALES BY ASSET CLASS
Mixed Asset was the best-selling asset class in October 2020 with £1.2 billion in net retail sales.
Fixed Income was the second best-selling asset class, with £698 million of inflows.
Equity funds experienced £456 million of inflows.
Money Market funds however experienced £262 million in net retail inflows.
Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) experienced £129 million of net retail inflows.
However, Property funds experienced net retail outflows in October of £163 million.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
Global was the best-selling equity fund region in October 2020, with net retail sales of £755 million.
Asia funds were second, seeing net retail inflows of £202 million.
North America funds came next with net retail inflows in October of £127 million.
Japan funds experienced net retail outflows of £19 million.
Europe funds saw net retail outflows of £186 million.
UK funds saw net retail outflows of £782 million.
Tracker funds saw a net retail inflow of £1.7 billion in October 2020. Tracker funds under management stood at £229 billion as of the end of October. Their overall share of industry funds under management was 17.6%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail inflow of £1.1 billion in October 2020. Responsible investment funds under management stood at £38.4 billion as of the end of October. Their overall share of industry funds under management was 3.0%.
GROSS RETAIL SALES BY DISTRIBUTION CHANNEL
In October, gross retail sales for UK fund platforms totalled £13.5 billion, representing a market share of 52%.
Gross retail sales through Other UK Intermediaries including IFAs were £6.4 billion, representing a market share of 24%.
Direct gross retail sales in October were £1.3 billion, representing a market share of 5%.
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:
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 investment management, supporting British savers, investors and businesses. Our 250 members manage £8.5 trillion of assets and the investment management industry supports 113,000 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.