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

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.

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.

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.

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 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-

Helen Ayres
Media Relations Manager
[email protected]
T +44 (0)20 7269 4620
M +44 (0)7508 724 066

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.

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 (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.

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