UK equity funds experienced £1.2 billion outflow in May
Thursday 05 July 2018
The Investment Association’s monthly statistics of UK investor behaviour in May 2018 show:
- Net retail sales were positive in May with an additional £1.9 billion invested into UK authorised funds, and funds under management totalling £1.2 trillion
- Targeted Absolute Return was the best-selling sector in May with £516 million net retails sales
- Outflows from UK equity funds reached £1.2 billion in May
Chris Cummings, Chief Executive of the Investment Association, said:
“In the context of ongoing Brexit uncertainty, outflows from UK equity funds reached £1.2 billion in May. As the clock ticks towards the UK leaving the EU, we need to see a gear change ahead of the next European Council Summit in October and significant progress being made towards a deal that will protect the wider European economy.”
Alastair Wainwright, Fund Market Specialist of the Investment Association, said:
“UK equities have been unpopular with UK investors since the beginning of January 2016, however outflows increased following the Brexit referendum result. However, UK equities are not necessarily reflective of the UK economy,given the high number of firms with international revenue bases listed in London.
In May we also saw outflows from the sterling corporate bond and high yield bond sectors, but inflows into the sterling strategic bond sector increased. Within the strategic bond sector there were higher flows into funds with a global investment strategy, and lower inflows into funds with high UK exposure.
May also saw the resurfacing of Targeted Absolute Return as the best-selling sector. This signals caution amongst investors as they look to insulate themselves from market movements in the traditional equity and fixed income markets.”
FUNDS UNDER MANAGEMENT AND NET SALES
Funds Under Management | Net Retail Sales | Net Institutional Sales | |
May 2018 | £1.2 trillion | £1.9 billion | £229 million |
May 2017 | £1.1 trillion | £3.8 billion | £344 million |
ASSET CLASSES
Funds classified as Other were the best selling asset class with £667 million in net retail sales. This includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors.
Mixed Asset was the second best-selling asset class with £572 million in net retail sales.
Fixed Income was the third best-selling asset class with net retail sales of £360 million.
Equity and Money Market experienced inflows of £264 million and £62 million respectively.
Property experienced a net retail outflow of £19 million.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
Global funds were the best-selling in May with net retail sales of £460 million.
North America funds were the next best-selling with net retail sales of £211 million.
Japan funds were the third best-selling with net retail sales of £141 million.
Asia funds saw net retail inflows of £70 million.
Whilst Europe and UK funds experienced net retail outflows of £88 million and £1.2 billion respectively.
Region | Net retail sales in May 2018 |
Average net retail sales for previous 12 months |
Global | £460 million | £397 million |
North America |
£211 million | £129 million |
Japan | £141 million | £171 million |
Asia | £70 million | £104 million |
Europe | -£88 million | £296 million |
UK | -£1.2 billion | -£382 million |
THE INVESTMENT ASSOCIATION SECTOR RANKINGS
The five best-selling Investment Association sectors for May 2018 were:
- 1. Target Absolute Return was the best-selling sector with net retail sales of £516 million.
- 2. Global with net retail sales of £347 million.
- 3. Mixed Investment 40-85% Shares with net retail sales of £192 million.
- 4. North America with net retail sales of £172 million.
- 5. £ Strategic Bond with net retail sales of £168 million.
The worst-selling Investment Association sector in May 2018 was UK All Companies with an outflow of £996 million.
Investment Association Sector | Ranking in May 2018 |
Net Retail Sales in May 2018 |
Ranking in Apr 2018 |
Net Retail Sales in Apr 2018 |
Asset Class |
Targeted Absolute Return | 1 | £516 million | 35 | -£132 million | Other |
Global | 2 | £347 million | 1 | £586 million | Equity |
Mixed Investment 40-85% Shares | 3 | £192 million | 3 | £346 million | Mixed Asset |
North America | 4 | £172 million | 2 | £446 million | Equity |
£ Strategic Bond | 5 | £168 million | 16 | £29 million | Fixed Income |
RETAIL DISTRIBUTION
In May, gross retail sales for UK fund platforms totalled £9.4 billion, representing a market share of 39.5% (46.2% in May 2017).
Other Intermediaries including UK IFAs and Wealth Managers made gross retail sales of £8.1 billion, representing a market share of 33.9% (23.8% in May 2017).
Direct gross retail sales in May were £1.8 billion, representing a market share of 7.5% (7.4% in May 2017).
FUND PLATFORM PRODUCT SALES
The five fund platforms that provide data to The Investment Association (AEGON, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) saw net retail sales of £646 million in May.
Personal Pensions had net sales of £562 million, ISAs £214 million, Insurance Bonds £5 million, while Unwrapped saw a net outflow of £135 million.
For the same five fund platforms, funds under management as at the end of May 2018 were £278 billion, compared with £249 billion a year earlier.
ISAs**
In May 2018, funds in ISAs provided by fund companies and the five fund platforms that feed data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) saw a net retail outflow of £15 million. The three best-selling sectors for ISAs based on the five fund platforms were:
- 1. Global (£72 million net sales)
- 2. £ Strategic Bond (£46.5 million net sales)
- 3. Mixed Investment 20-60% Shares (£44.6 million net sales)
FUND OF FUNDS
Funds of funds had a net retail inflow of £584 million in May.
Funds of funds that invested externally saw net retail sales of £273 million, while funds that invested internally saw net retail sales of £311 million.
Funds under management for funds of funds were £152 billion at the end of May 2018, accounting for 12.3% of industry funds under management, compared with 12.4% in May 2017.
TRACKER FUNDS
Tracker funds saw a net retail inflow of £466 million. Tracker funds under management stood at £173 billion as at the end of May 2018. Their overall share of industry funds under management was 14.1%, compared with 13.9% in May 2017.
ETHICAL FUNDS
Ethical funds experienced net retail inflows of £119 million in May 2018. Funds under management were £16 billion at the end of May, representing a 1.3% share of industry funds under management.
-ENDS-
For further information, please contact:
Anisha Patel, Head of Communications: [email protected]
T +44 (0)20 7269 4635
Helen Ayres, Media Relations Manager: [email protected]
T +44 (0)20 7269 4620; M +44 (0)7508 724 066
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 may 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 | ||
Specialist | |||||
Technology and Telecommunications |
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 Investment Association is the trade body that represents UK investment managers who manage over £5.7 trillion on behalf of clients
- 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.
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
IA press office: [email protected]
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.