Mixed asset and global equity funds drive sales in September

Tuesday 1 November 2016

The Investment Association’s monthly statistics of UK investor behaviour in September 2016 show:

• Total net retail fund sales of £664 million
• Mixed Asset was the best-selling asset class with sales of £374 million
• Tracker funds saw a net retail inflow of £351 million
• Global was the best-selling sector with sales of £393 million

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

“Following a difficult and extraordinary first half of the year, net retail sales were positive in the third quarter. Year to date there has been a net retail outflow of £1.6 billion across the industry, however, the growth in underlying asset values has increased industry funds under management by £85 billion in 2016 so far.”

Alastair Wainwright, Fund Market Specialist, said:

“Caution was again evident in September as investors moved out of equity funds in favour of arguably less risky mixed asset and money market funds.

“Mixed-asset was the best-selling asset class with investors focusing on the 40-85% Shares and 0-35% Shares sectors. Although 40-85% Shares was the most popular mixed asset sector in absolute terms, it is the 0-35% shares sector that is experiencing the greatest growth across all sectors. Looking at net retail sales relative to the size of the sector we see the 0-35% shares sector experienced net retail sales growth of 3.8% and 2.7% in August and September respectively.

“Money market funds experienced their second best-selling month on record at £297 million. Property fund sales were positive in September as advised and non-advised retail customers bought into the sector, however, discretionary fund managers continued to reduce their holdings in property funds.

“Despite global equity funds being popular in September with over £400 million worth of sales, equity funds overall once again experienced a net retail outflow. Equity funds overall have seen outflows every month in 2016 so far.”

FUNDS UNDER MANAGEMENT AND NET SALES

ASSET CLASSES

Mixed Asset funds were the best-selling asset class in September with net sales of £374 million.

Money Market funds were the second best-selling with net retail sales of £297 million.

Property funds were the third best-selling with net retail sales of £117 million.

Fixed income funds saw a net inflow of £100 million.

Equity funds saw a net retail outflow of £333 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global equity funds were the top-selling in September with sales of £447 million.

North American equity funds saw an inflow of £80 million, whilst Asian equity funds experienced a small inflow of £11 million.

Japanese equity funds saw a small outflow of £71 million. Whereas, European and UK equity funds saw larger outflows of £192 million and £620 million respectively.

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

The top five best-selling Investment Association sectors for September 2016 were:

• 1. Global was the best-selling sector with net retail sales of £393 million.
• 2. Targeted Absolute Return with net retail sales of £227 million.
• 3. Short Term Money Market with net retail sales of £204 million.
• 4. £ Corporate Bond with net retail sales of £180 million.
• 5. Mixed Investment 40%-85% Shares with net retail sales of £141 million.

The worst-selling Investment Association sector in September 2016 was the UK All Companies sector with a net retail outflow of £632 million.

RETAIL DISTRIBUTION

In September, gross retail sales for UK fund platforms totalled £6.8 billion, representing a market share of 46.1% (48.4% in September 2015).

Other Intermediaries including UK IFAs and Wealth Managers attracted gross retail sales of £3.5 billion, representing a market share of 23.9% (22.4% in September 2015).

Direct gross retail sales in September were £1.1 billion, representing a market share of 7.7% (10.9% in September 2015).

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 £610 million in September.

Personal Pensions had net sales of £492 million, ISAs (£94 million), Unwrapped (£31 million) and Insurance Bonds (-£7 million).

For the same five fund platforms, funds under management as at the end of September 2016 were £219 billion, compared with £189 billion a year earlier.

ISAs**

In September 2016, 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 outflow of £180 million.

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

• 1. UK Equity Income (£29 million net sales)
• 2. Mixed Investment 40-85% Shares (£22 million net sales)
• 3. Mixed Investment 20-60% Shares (£19 million net sales).

FUND OF FUNDS

Funds of funds had net retail sales of £306 million in September 2016.

Funds of funds invested into the same firm’s funds saw net retail sales of £163 million, compared to £143 million in funds of funds that invest externally.

Funds under management for funds of funds were £119 billion at the end of September 2016, accounting for 11.7% of industry funds under management, compared with 11.5 % in September 2015..

Tracker funds saw a net retail inflow of £351 million with funds under management of £134 billion as at the end of September 2016. Their overall share of industry funds under management was 13.3%, compared with 11.3% in September 2015.

ETHICAL FUNDS

Net retail sales of ethical funds were £49 million in September 2016. Funds under management were £11.8 billion at the end of September, representing a 1.2% share of industry funds under management.

Alex Hogan
Press & Digital Media Officer
[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.