Savers remain cautious in fifth consecutive month of net retail outflows

Thursday 4th April 2019

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

• Net retail sales were negative in February, with £156 million of outflows from UK authorised and recognised funds.
• Europe and UK equity funds continued to experience net retail outflows of £453 million and £236 million, respectively.
• Global was the best-selling sector with £513 million in net retail sales.

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

“Despite a slight improvement in investor confidence, February experienced the fifth consecutive month of net retail outflows.

“Savers turned towards Mixed Asset and Global equity funds to weather the ongoing economic and political uncertainty, giving European and UK equity funds, which saw continued outflows, the cold shoulder.”

FUNDS UNDER MANAGEMENT AND NET SALES

BEST SELLING INVESTMENT ASSOCIATION SECTORS

The five best-selling Investment Association sectors for February 2019 were:

• Global was the best-selling sector with net retail sales of £513 million.
• Global Bonds was second with net retail sales of £345 million.
• Mixed Investment 40-85% Shares was next with net retail sales of £206 million.
• Asia Pacific Excluding Japan followed with net retail sales of £155 million.
• Global Emerging Markets was fifth with net retail sales of £153 million.

The worst-selling Investment Association sector in February 2019 was Specialist with an outflow of £357 million.

NET RETAIL SALES BY ASSET CLASS

Mixed Asset was the best-selling asset class with £385 million in net retail sales.

Fixed Income was the second best-selling asset class with net retail sales of £77 million.

The remaining asset classes experienced outflows. Property saw net retail outflows of £45 million, followed by Money Market with net retail outflows of £62 million in February.

Funds classified as Other (which includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors) saw net retail outflows of £65 million, whilst Equity experienced outflows of £446 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

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

Asia funds were the next best-selling with net retail sales of £167 million.

The remaining regions experienced outflows. North America funds saw net retail outflows of £1 million, followed by Japan funds which experienced net retail outflows of £15 million.

UK and Europe funds experienced net retail outflows of £236 million and £453 million, respectively.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £476 million. Tracker funds under management stood at £188 billion as of the end of February 2019. Their overall share of industry funds under management was 15.9%.

ETHICAL FUNDS

Ethical funds experienced net retail inflows of £64 million in February 2019. Funds under management were £17 billion at the end of February, representing a 1.4% share of industry funds under management.

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL

In February, gross retail sales for UK fund platforms totalled £8 billion, representing a market share of 39.7%.

Other Intermediaries including UK IFAs made gross retail sales of £5 billion, representing a market share of 24.9%.

Direct gross retail sales in February were £1.9 billion, representing a market share of 9.4%.

-ENDS-

For further information, please contact:

Helen Ayres, Media Relations 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

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 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:

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.