Equities return to positive inflows in June as investors express cautious optimism
UK savers put £1.2 billion into funds as inflows bounced back in June, with the figure bringing overall inflows for the first half of 2024 to £1.7 billion. This contrasts with £5.6 billion outflows in H1 2023 and £18.6 billion outflows in H2 2023, further signalling a potential turn of the tide for fund flows and improving investor confidence.
Key findings for June and H1 2024
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Index trackers took in £2.6 billion in net retail sales in June, overwhelmingly to equity index trackers. Inflows to index trackers for the first half totalled £15.1 billion, already exceeding the annual £13.8 billion inflow in 2023.
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Retail investors placed a net £1.2 billion into equities in June, lifting the first half inflow to a positive £424 million. H1’s positive inflow was driven by a rebound in sales in Q2, which saw inflows of £2.0 billion, compared with a £1.6 billion outflow in Q1.
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June’s inflows included a record monthly inflow of £868 million into Europe ex UK sector funds.
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Money Market funds saw inflows of £1.2 billion in June, with the £1.5 billion inflow to Short Term Money Market making it the best-selling IA sector for the month.
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Fixed income funds saw net retail outflows of £1.2 billion in June, reducing the first half inflow to just £58 million for the asset class. Following a £440 million inflow to bond funds in Q1, investors pulled £382 million in Q2.
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Responsible Investment funds saw outflows continue in June, with £302 million pulled. £1.4 billion was taken from these funds in the first half of 2024.
All eyes on equities
With a return to inflows of £1.2 billion for equities in June, the data points towards improved investor confidence as inflation continues to fall. In early June, encouraging inflation data and stable prices enabled the European Central Bank to make a 0.25% cut to three key interest rates. In IA data, Europe ex. UK equity funds saw a record monthly inflow of £868 million amidst improving economic conditions.
Looking at the bigger picture, the data also shows investors allocating capital to equities across other regions in Q2, with the highest inflows of £2.7 billion going to global equities as investors again opt for diversification. This is a shift from Q1 where the strong performance of the US and the magnificent 7 stocks had attracted investors to put £1.5 billion into North American funds.
Overall, equities have seen a year-to-date inflow of £424 million, compared to a significant £10 billion outflow in the asset class in the first six months of 2023. Despite mild outflows of £1.6 billion in the first three months of the year, the six-month positive result has been driven by a Q2 rebound of £2.0 billion in net retail sales, boosted by inflows throughout ISA season.
An inflection point for equity flows
Quarterly equity flows by region
Whilst UK equities remain in outflow following a record movement out in May, investors may begin to feel more positive about investing in UK companies as the new government sends a clear message on delivering economic growth.
Miranda Seath, Director, Market Insight & Fund Sectors at the Investment Association, said: “June has seen a return to inflow as investors opted to allocate capital back into equities. Investor confidence has been building throughout Q2 2024 as inflation has calmed and, in the UK, we have seen the first base rate cut from the Bank of England since March 2020. This decision could help to improve confidence and flows as we head into the second half of 2024.
“However, recent movements on the global stage on the back of poorer than anticipated US employment data have highlighted the complexities of the macroeconomic environment. Whilst the health of the US economy has implications for all major markets, it’s critical that investors remain focused on long-term goals rather than short-term market fluctuations.
“Investors thrive on greater certainty and in the UK, investor sentiment should be further improved by the new Government’s commitment to driving growth and maintaining fiscal responsibility. Following a prolonged period of outflow, we are beginning to see conditions that could give a boost to UK equities as we move into the autumn.”
ENDS
APPENDIX
FUNDS UNDER MANAGEMENT AND NET SALES – June 2024
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Funds Under Management |
Net Retail Sales |
Net Institutional Sales |
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June 2024 |
£1.50 trillion |
-£1,22 billion |
-1.90 billion |
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June 2023 |
£1.38 trillion |
-£4.49 billion |
-£2.71 billion |
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for June 2024 were:
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Short Term Money Market with net retail sales of £1,46 billion.
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Europe Excluding UK with net retail sales of £868 million.
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Corporate Bond followed with net retail sales of £770 million.
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Global Emerging Markets with net retail sales of £567 million.
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Global was fifth with net retail sales of £464 million.
The worst-selling Investment Association sector in June 2024 was Global Emerging Markets Bond - Local Currency, which experienced outflows of £761 million.
NET RETAIL SALES BY ASSET CLASS
Equity funds saw £1.24 billion in inflows.
Money Market saw £1,20 billion in inflows.
Other saw £418 million in inflows.
Property saw £208 million in outflows.
Mixed Asset saw £240 million in outflows.
Fixed Income saw £1,19 billion in outflows.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
Global funds saw net retail inflows of £998 million.
Europe funds experienced inflows of £884 million.
Japan funds experienced inflows of £148 million.
Asia funds experienced inflows of £69 million
North America saw net retail outflows of £60 million.
UK funds saw net retail outflows of £1.05 billion.
TRACKER FUNDS
Tracker funds saw net retail inflows of £2.6 billion in June 2024. Tracker funds under management stood at £365 billion at the end of May. Their overall share of industry funds under management was 24.3%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail outflow of £302 million in June 2024. Responsible investment funds under management stood at £105 billion at the end of June. Their overall share of industry funds under management was 7.0%.
For further information, please contact:
Helen Ayres, Head of Communications: [email protected].
T: +44 7596 872575
Ellen Hodgetts, Communications Manager: [email protected]
Ismail Abdi, Communications Executive, [email protected]
+44 7596 872575
IA press office: [email protected]
Notes to Editors
The Investment Association has made a data revision to its monthly fund statistics, which has resulted in revising down annual net retail sales over 2023. The change to flow data is principally from funds that are not allocated to the IA sectors. These sales appear in the Unallocated row on tab 7 of the 2023 press tables. This in turn has impacted on the reported total retail sales at industry and asset class level. There has been a small downward revision of FUM. Firms making revisions to the data reported have now submitted updated data to the IA with the revised year-end figures published in this month’s press release.
To see a breakdown of the fund data referenced in this press release, please see all 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:
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Asia |
Europe |
Global |
Japan |
North America |
UK |
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Asia Pacific excl. Japan |
Europe excl. UK |
Global |
Japan |
North America |
UK All Companies |
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Asia Pacific incl. Japan |
Europe incl. UK |
Global Emerging Markets |
Japanese Smaller Companies |
North America Smaller Companies |
UK Equity Income |
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China/Greater China |
Europe Smaller Companies |
Global Equity Income |
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UK Smaller Companies |
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India/Indian Subcontinent |
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Specialist |
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Healthcare |
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Technology and Technology innovation |
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Financials and Financial innovation |
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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, Quilter, 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 £8.8 trillion of assets and the investment management industry supports 126,400 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:
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Build people’s resilience to financial adversity
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Help people achieve their financial aspirations
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Enable people to maintain a decent standard of living as they grow older
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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.
