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Funds under management up £36 billion in 2015

Monday 25 January 2016

The Investment Association today publishes its statistics for authorised investment funds for the year 2015:

  • Funds under management reached a record high of £871 billion
  • Net retail sales of £18 billion in 2015
  • Equity was the best-selling asset class for the second consecutive year with net retail sales of £8.4 billion
  • UK Equity Income was the best-selling Investment Association sector for the second year running with net retail sales of £4.3 billion
  • We saw record net retail sales of tracker funds in 2015 of £5.4 billion and funds under management hit an all time high of £108 billion
  • It was also a record-breaking year for Money Market funds with net retail sales of £591 million

Guy Sears, Interim Chief Executive of The Investment Association said:

“Despite market uncertainty surrounding China, commodity prices and central bank interest rate policy throughout 2015, we saw funds under management of authorised investment funds hit an all-time high of over £870 billion.

“After a slow start, net retail sales bounced back in the final three quarters of the year with investors favouring equity products, particularly European funds and those with an income focus.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under Management Net Retail Sales Net Institutional Sales
2015 £871 billion £17.6 billion -£0.6 billion
2014 £835 billion £21.6 billion £11.2 billion


(Table 3 and Chart A)

ASSET CLASSES

Equity was the best-selling asset class in 2015 with total net retail sales of £8.4 billion, slightly down from £8.7 billion in 2014.

Property was the second best-selling with net retail sales of £2.7 billion, down from £3.8 billion in 2014.

Mixed Asset was the third best-selling with net retail sales of £2.5 billion, down from £4.0 billion a year earlier.

Money Market funds saw net retail sales of £591 million in 2015, their highest on record and up from £63 million in 2014.

Fixed Income funds saw a record net retail outflow of £519 million in 2015, compared to a net retail inflow of £1.5 billion in 2014.

2015 RANKING ASSET CLASS 2015 NET RETAIL SALES 2014 RANKING 2014 NET RETAIL SALES
1 Equity £8.4 billion 1 £8.7 billion
2 Other* £3.9 billion 4 £3.6 billion
3 Property £2.7 billion 3 £3.8 billion
4 Mixed Asset £2.5 billion 2 £4.0 billion
5 Money Markets £591 million 6 £63 million
6 Fixed Income -£519 million 5 £1.5 billion

(Table 4 and Chart B)

NET RETAIL SALES OF EQUITY FUNDS BY REGION**

European equity funds were the best-selling in 2015 with record net retail sales of £4.5 billion, up from £221 million in 2014.

Global equity funds were the second best-selling region with net retail sales of £2.2 billion in 2015, down from £3.2 billion in 2014.

The UK was the third best-selling equity fund region with net retail sales of £1.9 billion, down from £5.0 billion in 2014.

Japanese equities were the fourth best-selling with record net retail sales of £1.1 billion, up from £454 million in 2014.

Asian equity funds were the worst-selling in 2015 with a record net retail outflow of £867 million in 2015, compared to a net retail inflow of £53 million in 2014.

Region Net retail sales
in 2015
Net retail sales
in 2014
Europe £4.5 billion £221 million
Global £2.2 billion £3.2 billion
UK £1.9 billion £5.0 billion
Japan £1.1 billion £454 million
North America -£364 million -£323 million
Asia -£867 million £53 million

(Table 4)

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

The top five best-selling Investment Association sectors for 2015 were:

  • 1. UK Equity Income with net retail sales of £4.3 billion.
  • 2. Targeted Absolute Return with net retail sales of £4.0 billion.
  • 3. Europe Excluding UK with net retail sales of £3.5 billion.
  • 4. Property with net retail sales of £2.7 billion.
  • 5. Mixed Investment 40-85% Shares with net retail sales of £1.5 billion.

The worst-selling Investment Association sector in 2015 was the UK All Companies sector with a net retail outflow of £2.2 billion.

Investment Association Sector Ranking in 2015 Net Retail Sales in 2015 Ranking in 2014 Asset Class
UK Equity Income 1 £4.3 billion 1 Equity
Targeted Absolute Return 2 £4.0 billion 5 Specialist
Europe Excluding UK 3 £3.5 billion 10 Equity
Property 4 £2.7 billion 2 Specialist
Mixed Investment 40-85% Shares 5 £1.5 billion 3 Mixed Asset

(Tables 5,6,7)

RETAIL DISTRIBUTION

In 2015, gross retail sales for UK fund platforms totalled £83.2 billion, representing a market share of 52.0% (54.6% in 2014).
Other Intermediaries (including Wealth Managers, Stockbrokers, IFAs and Discretionary Fund Managers) attracted gross retail sales of £64.0 billion in 2015 representing a market share of 40.0% (37.9% in 2014).

Direct gross retail sales in 2015 were £12.9 billion, representing a market share of 8.1% (7.5% in 2014).

(Table 8)

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) net sales for 2015 were £12.7 billion.
Personal Pensions had the highest net sales at £5.5 billion, followed by Unwrapped (£3.7 billion) ISAs (£3.5 billion), and Insurance Bonds (-£11 million).

For the same five fund platforms, funds under management as at the end of 2015 were £201 billion, compared with £183 billion a year earlier.

(Table 9)

ISAs***

In 2015, net retail sales of funds in ISAs provided by fund companies and the five fund platforms that provide data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) were £2.6 billion, up from £2.2 billion in 2014.

(Table 10)

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

  • 1. UK Equity Income (£1.3 billion net sales)
  • 2. Mixed Investment Shares 20-60% Shares (£446 million net sales)
  • 3. Property (£377 million net sales)

(Table 5)

FUND OF FUNDS

Net retail sales for funds of funds in 2015 were £3.7 billion.
Funds of funds invested with different asset management firms saw net retail sales of £2.5 billion, compared to net retail sales of £1.2 billion for funds of funds invested into the same firm’s funds.

Funds under management for funds of funds were at £110 billion at the end of 2015, accounting for 12.6% of industry funds under management, compared with 11.8% at the end of 2014.

(Table 11)

TRACKER FUNDS

Tracker funds saw record net retail sales of £5.4 billion with funds under management of £107.7 billion as at the end of 2015 - a 16% increase from 2014.

Their overall share of industry funds under management at the end of 2015 was 12.4%, compared with 11.2% at the end of 2014.

(Table 12)

ETHICAL FUNDS

Net retail sales of ethical funds were £715 million in 2015, the highest on record. Funds under management were £10.7 billion at the end of 2015, representing a 1.2% share of industry funds under management.

(Table 12)

OVERSEAS DOMICILED FUNDS

In 2015, overseas domiciled funds saw a net retail sales of £1.7 billion, up from £1.3 billion in 2014.

(Table 13)

-ENDS-

For further information, please contact:

Alex Hogan

Press & Digital Media Officer
Alex.Hogan@theinvestmentassociation.org
T +44 (0)20 7269 4620
M +44 (0)7508 724 066

Notes for Editors

Below is a full list of tables and charts accompanying the press release:

All tables

  1. Summary table
  2. Funds under management by asset class
  3. Net sales of funds (retail and institutional)
  4. Net retail sales of funds by asset class
  5. Investment Association sector rankings
  6. Net retail sales by Investment Association sector
  7. Best and worst selling Investment Association sectors
  8. Retail sales by distribution channel
  9. Five fund platforms – Funds under management and net sales by product
  10. ISA Funds under management and net sales
  11. Funds of Funds – funds under management and net retail sales
  12. Tracker and Ethical funds – funds under management and net retail sales
  13. Overseas domiciled funds – funds under management and net sales

Charts

  1. Net retail sales
  2. Net retail sales by asset classes

The Investment Association's figures for fund sales cover retail and institutional sales of UK authorised unit trusts and open ended investment companies (OEICs). 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 Other asset class category includes funds from the Targeted Absolute Return and Unclassified Sectors, which together contribute the overwhelming majority of net retail sales within the asset class. A large part of the Unclassified Sector is made up of risk-targeted and private funds.

** 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 £5.5 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.
  • Our website includes an area for consumers which explains why it’s important to invest and how you can invest in a fund.