Funds return to modest outflow in May as ISA season boost fades – IA monthly stats release
FOR IMMEDIATE RELEASE
UK savers took a modest £136 million out of funds in May 2024, according to data published by the Investment Association (IA) today. May’s small outflow follows two consecutive months of positive sales. Combined sales of £3.6 billion in March and April were boosted by investors topping up their stocks and shares ISAs at the end of the 23/24 tax year and investing early to maximise returns in the new tax year.
Key findings for May 2024
- Inflows to index trackers remained strong with net retail sales of £2.1 billion. This included inflows of £1.2bn into equity trackers and £815m in bond trackers.
- Bond funds saw the highest outflows with £318 million withdrawn, followed by £294 million from mixed asset funds and £195 million from equity funds.
- Whilst equity funds saw an outflow overall, sales into global equity were £434 million in May, making it the top selling IA equity sector. Sales to UK equities worsened however – we saw a record outflow from UK equity funds of £1.8 billion during the month.
- Short Term Money Markets was the best-selling sector in May with net retail inflows of £696 million. This suggests investors may be taking a ‘wait and see’ approach to deploy their capital later in the year once interest rates are cut and there is greater political certainty following elections.
- Responsible investment funds saw outflows of £405 million in May, following a minimal outflow of £9 million in April.
Net retail sales by asset class
All major asset classes turned to outflows as savers continue to grapple with economic uncertainties, however, outflows remained modest in comparison with 2023 figures.
Record UK outflows
UK equity funds dominated outflows in May, with a record £1.8 billion withdrawn by investors. May outflows further an established trend of outflows from UK equity funds, with £13.6 billion withdrawn in 2023, and £12.0 billion in 2022. Diversification of portfolios remains a driving factor in UK equity outflows. Investors and their advisors continue to reallocate outside of the UK, with strong inflows for global, Europe and North American funds.
Miranda Seath, Director, Market Insight & Fund Sectors at the Investment Association, said:
“Despite net retail sales returning to negative territory in May, monthly outflows of £136 million represent a relatively modest dip compared to what we have seen over the past 12 months. Whilst flows have turned negative, this follows a boost of £1.3 billion in inflows in April, driven by UK ISA season, and overall, they remain substantially above the average £2.1 billion monthly outflow for the preceding 12 months.
“Our May data could be a sign that investor confidence is stabilising. Whilst geopolitical uncertainty remains, much is set to be decided at the ballot box over the coming months, and investors will get used to a new political landscape. Looking forward, there are reasons to be positive as we expect interest cuts in the UK and potentially in the USA later this year as inflation continues to fall. As outlook potentially improves, we will be keeping a close eye on how investors respond.”
ENDS
APPENDIX
FUNDS UNDER MANAGEMENT AND NET SALES - MAY 2024
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Funds Under Management |
Net Retail Sales |
Net Institutional Sales |
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May 2024 |
£1.48 trillion |
-£136 million |
-1.52 billion |
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May 2023 |
£1.38 trillion |
-£1.55 billion |
-£1.78 billion |
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for May 2024 were:
- Short Term Money Market with net retail sales of £696 million.
- Corporate Bond with net retail sales of £463 million.
- Global followed with net retail sales of £434 million.
- UK Gilts with net retail sales of £354 million.
- Europe Excluding UK was fifth with net retail sales of £274 million.
The worst-selling Investment Association sector in May 2024 was UK All Companies, which experienced outflows of £1.36 billion.
NET RETAIL SALES BY ASSET CLASS
Money Market saw £702 million in inflows.
Property saw £15 million in outflows.
Other saw £17 million in outflows.
Equity funds saw £195 million in outflows.
Mixed Asset saw £294 million in outflows.
Fixed Income saw £318 million in outflows.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
Global funds saw net retail inflows of £553 million.
Europe funds experienced inflows of £249 million.
North America experienced inflows of £189 million.
Asia funds experienced outflows of £170 million
Japan funds experienced outflows of £210 million.
UK funds saw net retail outflows of £1.8 billion.
TRACKER FUNDS
Tracker funds saw net retail inflows of £2.1 billion in May 2024. Tracker funds under management stood at £355 billion at the end of May. Their overall share of industry funds under management was 24%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail outflow of £405 million in May 2024. Responsible investment funds under management stood at £103 billion at the end of May. Their overall share of industry funds under management was 7%.
ENDS
For further information, please contact:
Helen Ayres, Head of Communications: [email protected]
T: +44 (0)20 7269 4620
Ellen Hodgetts, Communications Manager: [email protected]
T: +44 7548841289
Ismail Abdi, Communications Executive: [email protected]
T: +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 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 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.
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:
- 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.
