Funds industry experiences highest level of half yearly net sales on record

Friday 04 August 2017

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

• Funds under management now stand at £1.1 trillion
• UK retail investors placed £18.4 billion in UK funds in H1 2017
• All asset classes experienced positive net retail investor flows in H1 2017

Chris Cummings, Chief Executive of the Investment Association, said: “The first half of 2017 was a record breaking period for the funds industry as retail investors placed £18.4 billion in UK authorised funds. This is the highest level of net sales in the first half of any year on record. Funds under management increased by £58 billion in the year to end of June, to £1.1 trillion.”

Alastair Wainwright, Fund Market Specialist, said: “So far, 2017 has been an extraordinary year for the UK funds industry as investors seem to have returned from their 2016 hiatus. Net retail sales were once again strong in June, reaching £2.9 billion. Over the last six months, retail and institutional net sales into UK authorised funds totalled £28.7 billion.

There were positive net retail investor flows into all asset classes in the first half of 2017. Mixed Asset funds attracted the highest flows with £5.7 billion, Fixed Income funds took in £4.2 billion and Equity funds rebounded from a negative 2016 with a net retail inflow of £4.1 billion.

Targeted Absolute return continued its reign as the most popular individual sector for retail investors with a net inflow of £2.2 billion over the last six months. The £ Strategic Bond sector attracted £1.8 billion and Global equity sales were £1.6 billion.

The UK equity sectors were least popular so far this year as investors preferred non-sterling denominated equity funds. June was particularly bad as retail investors extracted £1.1 billion across the three UK equity sectors.

Passive funds received a net retail inflow of £5.8 billion over the last six months. Equity passive products were most popular with £2.9 billion in net retail sales, followed by Mixed Asset passives that brought in £1.7 billion of new retail money.”

FUNDS UNDER MANAGEMENT AND NET SALES

ASSET CLASSES

Fixed Income was the best-selling asset class in June 2017, with net retail sales of £1 billion.

Mixed Asset was the second best-selling with net retail sales of £905 million.

Money Market funds was the third best-selling asset class with net retail sales of £237 million.

Equity saw inflows of £166 million, while Property funds saw outflows of £2 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global equity funds were the best-selling in June with net retail sales of £707 million.

European equity funds were the second best-selling with net retail sales of £209 million.

Japanese equity funds were the third best-selling with net retail sales of £168 million.

UK equity funds experienced a net retail outflow of £1.1 billion.

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

• Global was the best-selling sector with net retail sales of £465 million.
• Targeted Absolute Return with net retail sales of £447 million.
• £ Strategic Bond excluding UK with net retail sales of £363 million.
• Global Emerging Markets Bond with net retail sales of £309 million.
• Mixed Investment 40-80% Shares with net retail sales of £226 million.

The worst-selling Investment Association sector in June 2017 was the UK All Companies sector with an outflow of £486 million.

RETAIL DISTRIBUTION

In June, gross retail sales for UK fund platforms totalled £9 billion, representing a market share of 45.4% (48.1% in June 2016).

Other Intermediaries including UK IFAs and Wealth Managers attracted gross retail sales of £4.7 billion, representing a market share of 23.6% (24% in June 2016).

Direct gross retail sales in June were £1 billion, representing a market share of 5.3% (8.5% in June 2016).

FUND PLATFORM PRODUCT SALES

For the five fund platforms that provide data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) we saw net retail sales of £879 million in June.

Personal Pensions had net sales of £436 million, ISAs £254 million, and Unwrapped £186 million, whilst Insurance Bonds saw net inflows of £3 million.

For the same five fund platforms, funds under management as at the end of June 2017 were £247 billion, compared with £204 billion a year earlier.

In June 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 net retail inflows of £55 million.

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

• Global (£47.5 million net sales)
• Mixed Investment 20-60% Shares (£45.2 million net sales)
• Mixed Investment 40-85% Shares (£36.3 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £800 million in June 2017.

Funds of funds that invested externally saw net retail sales of £326 million, while funds that invested internally saw net retail sales of £474 million.

Funds under management for funds of funds were £140 billion at the end of June 2017, accounting for 12.8% of industry funds under management, compared with 11.9% in June 2016.

Tracker funds saw a net retail inflow of £1.1 billion. Tracker funds under management stood at £153 billion as at the end of June 2017. Their overall share of industry funds under management was 13.9%, compared with 12.7% in June 2016.

ETHICAL FUNDS

Net retail sales of ethical funds were £46 million in June 2017. Funds under management were £13.7 billion at the end of June, representing a 1.2% share of industry funds under management.

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.

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.