Savers return to funds with £11.2bn inflows in Q2 2020
THURSDAY 6 AUGUST 2020
UK savers put a cumulative £11.2 billion into retail funds in the second quarter of 2020, according to latest figures published today by the Investment Association (IA). The other key findings:
- Net retail sales reached £2.2 billion in June, marking the third consecutive month of inflows. Inflows for the first half of 2020 reached £8.7 billion.
- Bond funds saw growing net retail sales of £2.1 billion in June, as they continued to recover from March’s significant outflows.
- Tracker funds remain steady, with increasing net retail sales of £2.1 billion in June.
- UK equity funds saw a reversal of fortunes with net retail outflows of £1.1 billion in June.
Chris Cummings, Chief Executive of the Investment Association, said:
“Following the highest ever monthly outflow in March, the second quarter of 2020 saw savers invest more than they did throughout the whole of 2019. Sales rebounded strongly from April through to June to reach £11.2bn for the quarter, eclipsing 2019’s annual total of £9.8bn.
“After a solid run of sales, strong economic headwinds began to turn investors away from UK shares in June as they withdrew £1.1bn from UK equity funds. With coronavirus infection rates now rising globally post-lockdown and US real GDP having contracted 32.9% in Q2 - the highest ever fall - the outlook for fund flows for the second half of 2020 remains uncertain.”
FUNDS UNDER MANAGEMENT AND NET SALES
|Funds Under Management1||Net Retail Sales||Net Institutional Sales|
|June 2020||£1.3 trillion||£2.2 billion||-£129 million|
|June 2019||£1.3 trillion||£2.5 billion||-£573 million|
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for June 2020 were:
- Global was first with net retail sales of £930 million.
- Global Bonds was second with net retail sales of £868 million.
- £ Corporate Bond followed with net retail sales of £732 million.
- North America was fourth with net retail sales of £348 million.
- Mixed Investment 40-85% Shares was fifth with net retail sales of £287 million.
The worst-selling Investment Association sector in June 2020 was UK All Companies with an outflow of £662 million.
NET RETAIL SALES BY ASSET CLASS
Fixed Income was the best-selling asset class in June 2020 with £2.1 billion in net retail sales.
Equity was the second best-selling asset class, with £421 million of inflows.
Mixed Asset funds experienced £398 million of inflows.
All other asset classes experienced outflows. Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) experienced £36 million of net retail outflows in June.
Property funds were next with £115 million in net retail outflows in June.
Money Market funds followed with net retail outflows in June of £518 million.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
Global was the best-selling equity fund region in June 2020, with net retail sales of £503 million.
North America funds were second, seeing net retail inflows of £328 million.
Asia funds came next with net retail inflows in June of £136 million.
Europe funds experienced net retail inflows of £88 million.
Japan funds saw net retail inflows of £1 million.
UK funds saw net retail outflows of £1.1 billion.
Tracker funds saw a net retail inflow of £2.1 billion in June 2020. Tracker funds under management stood at £230 billion as of the end of June. Their overall share of industry funds under management was 18%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail inflow of £669 million in June 2020. Responsible investment funds under management stood at £33 billion as of the end of June. Their overall share of industry funds under management was 2.6%.
GROSS RETAIL SALES BY DISTRIBUTION CHANNEL
In June, gross retail sales for UK fund platforms totalled £13 billion, representing a market share of 49%.
Gross retail sales through Other UK Intermediaries including IFAs were £7 billion, representing a market share of 25%.
Direct gross retail sales in June were £1.3 billion, representing a market share of 5%.
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
Notes to 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.
About the Investment Association (IA):
- The IA champions UK investment management, supporting British savers, investors and businesses. Our 250 members manage £7.7 trillion of assets and the investment management industry supports 115,000 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 37% of all assets managed in Europe.