07
Dec
2017

Fixed Income is best-selling asset class for fifth consecutive month

The Investment Association’s monthly statistics of UK investor behaviour in October 2017 show:

  • Monthly net retail sales exceed £5 billion in October
  • Fixed income was the best-selling asset class with net retail sales of more than £2 billion
  • UK Equity Income was the worst selling sector in October with a net retail outflow of £272 million as investors sell out of UK equities
  • Funds Under Management increase by £29bn in October

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

“2017’s record breaking run continued in October as monthly net retail sales were again in excess of £5 billion. Industry funds under management also increased by almost £30 billion through the month which means that, at the end of October our members were responsible for £1.194 trillion of UK investor savings and investments.”

Alastair Wainwright, Fund Market Specialist of The Investment Association, said:

“For the fifth month in a row, fixed income was the best-selling asset class with net retail sales of more than £2 billion. For the third month in a row, Sterling Strategic Bond was the most popular sector with retail investors as they allocated £1.6 billion in October. Notably, the Sterling Strategic Bond has featured in the five best-selling sectors each month since December 2016.

Mixed Asset funds continue to be popular with UK investors, with around £1 billion a month being invested in this asset class since February this year. The last time mixed asset experienced a monthly outflow was January 2016.

UK investors continue to sell out of UK equities as both the UK All Companies and UK Equity Income sectors experienced outflows in October for the sixth month in a row. UK Equity Income was the worst selling sector in October with a net retail outflow of £272 million. UK All Companies experienced a net retail outflow of £224 million.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under Management Net Retail Sales Net Institutional Sales
October 2017

£1.2 trillion

£5 billion

£1.9 billion

October 2016

£1 trillion

£873 million

£794 million

ASSET CLASSES

Fixed Income was the best selling asset class with £2 billion in net retail sales.

Funds classified as Other were the second best-selling with net retail sales of £1.1 billion. This includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors.

Mixed Asset was the third best-selling asset class with net retail sales of £963 million.

Equity was the fourth best-selling asset class with net retail sales of £644 million.

Money Market funds saw an inflow of £270 million, whilst Property funds experienced an inflow of £54 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Japan funds were the best-selling in October with net retail sales of £234 million.

Europe equity funds were the next best-selling with net retail sales of £220 million.

Asia funds were the third best-selling with net retail sales of £140 million.

Global and North America funds saw net retail sales of £129 million and £64 million respectively.

UK equity funds experienced a net retail outflow of £444 million.

Region Net retail sales
in October 2017
Average net retail sales
for previous 12 months
Japan

£234 million

£93 million

Europe

£220 million

£104 million
Asia

£140 million

-£68 milllion

Global

£129 million

£589 million
North America

£64 million

£114 million
UK

-£444 million

-£198 million

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

The five best-selling Investment Association sectors for October 2017 were:

  • £ Strategic Bond was the best-selling sector with net retail sales of £1.6 billion.
  • Target Absolute Return with net retail sales of £400 million.
  • Global with net retail sales of £345 million.
  • Global Bonds with net retail sales of £327 million.
  • Mixed Investment 40-85% Shares with net retail sales of £224 million.

The worst-selling Investment Association sector in October 2017 was the UK Equity Income sector with an outflow of £272 million.


Investment Association Sector

Ranking in October
2017

Net Retail Sales

in October 2017

Ranking in
September 2017

Net Retail Sales
in September 2017

Asset Class

£ Strategic Bond

1

£1.6 billion

1

£985 million

Fixed Income

Targeted Absolute Return

2

£400 million

5

£273 million

Other

Global

3

£345 million

2

£534 million

Equity

Global Bonds

4

£327 million

12

£179 million

Fixed Income

Mixed Investment 40-85% Shares

5

£224 million

7

£258 million

Mixed Asset

RETAIL DISTRIBUTION

In October, gross retail sales for UK fund platforms totalled £8.9 billion, representing a market share of 39.9% (46.7% in October 2016).

Other Intermediaries including UK IFAs and Wealth Managers made gross retail sales of £6.1 billion, representing a market share of 27.4% (22.5% in October 2016).

Direct gross retail sales in October were £1.6 billion, representing a market share of 7.1% (11.1% in October 2016).

FUND PLATFORM PRODUCT SALES

The five fund platforms that provide data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) saw net retail sales of £1.2 billion in October.

Personal Pensions had net sales of £710 million, Unwrapped £350 million and ISAs £131 million. Whilst Insurance Bonds saw a net inflow of £9 million.

For the same five fund platforms, funds under management as at the end of October 2017 were £255 billion, compared with £223 billion a year earlier.

ISAs**

In October 2017, 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 £93 million.

The three best-selling sectors for ISAs based on the five fund platforms were:

  • Global (£33 million net sales)
  • Mixed Investment 20-60% Shares (£30 million net sales)
  • Mixed Investment 40-85% Shares (£25 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £783 million in October.

Funds of funds that invested externally saw net retail sales of £487 million, while funds that invested internally saw net retail sales of £296 million.

Funds under management for funds of funds were £150 billion at the end of October 2017, accounting for 12.5% of industry funds under management, compared with 11.8% in October 2016.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £627 million. Tracker funds under management stood at £162 billion as at the end of October 2017. Their overall share of industry funds under management was 13.6%, compared with 12.7% in October 2016.

ETHICAL FUNDS

Net retail sales of ethical funds were £75 million in October 2017. Funds under management were £14.9 billion at the end of October, representing a 1.2% share of industry funds under management.

-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

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 (Cofunds, 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.