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Industry assets at 12-month high despite June outflows

Tuesday 2 August 2016

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

  • Funds under management rose to £948 billion at the end of June
  • Retail investors redeemed £3.5 billion (-0.37%) from funds in June
  • Equity funds accounted for the majority of the outflow with £2.8 billion (-0.51%) redeemed
  • Property funds experienced an outflow of £1.4 billion (-5.7%)
  • Mixed Asset funds also experienced a small outflow of £191 million (-0.12%)
  • Fixed income funds received a net retail inflow of £258 million (+0.14%), the fourth consecutive month of positive retail flows

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

“The retail outflow in June occurred in the context of record levels of funds under management, and represented just 0.37% of total assets during a period of intense market volatility. Clearly, Brexit has been unsettling, with property and equity funds particularly affected following earlier outflows during 2016. At the same time, flows were positive into fixed income and targeted absolute return sectors as investors sought safer harbours.

“In the first six months of this year, industry funds under management grew by £22.6 billion. Fixed income funds saw the largest growth in funds under management in the year to the end of June with £13 billion. Funds under management in mixed asset funds increased by £5.2bn and equity funds grew by £1.4bn.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under Management Net Retail Sales Net Institutional Sales
June 2016 £948 billion -£3.5 billion £883 million
June 2015 £920 billion £1.0 billion -£9 million

ASSET CLASSES

Fixed Income funds were the best-selling asset class in June with net sales of £258 million.

Money Market funds were the second best-selling with net retail sales of £157 million.

Mixed Asset funds saw a net retail outflow of £191 million.

Property funds saw a net retail outflow of £1.4 billion.

Equity funds saw the largest net retail outflow of £2.8 billion.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

There were outflows across all equity regions in June.

UK equity funds saw the largest outflow of £1.0 billion, followed by European equity funds which had an outflow of £813 million.

Global equity funds experienced an outflow of £386 million in June.

Asian equity funds and North American equity funds had outflows of £191 million and £186 million respectively.

Japanese equity funds saw the lowest outflow of £131 million.


Region Net retail sales
in June 2016
Average net retail sales
for previous 12 months
Japan -£131 million £23 million
North America
-£186 million £33 million
Asia -£191 million -£107 million
Global
-£386 million £49 million
Europe
-£813 million £121 million
UK
-£1.0 billion £259 million

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

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

  • 1. Global Bonds was the best-selling sector with net retail sales of £250 million.
  • 2. Targeted Absolute Return with net retail sales of £221 million.
  • 3. £ Corporate Bond with net retail sales of £114 million.
  • 4. Short Term Money Market with net retail sales of £101 million.
  • 5. UK Gilts with net retail sales of £86 million..

The worst-selling Investment Association sector in June 2016 was the the Property sector with a net retail outflow of £1.4 billion.

Investment Association Sector Ranking in
June 2016
Net Retail Sales
in June 2016
Ranking in
May 2016
Net Retail Sales
in May 2016
Asset Class
Global Bonds 1 £250 million 31 -£58 million Fixed Income
Targeted Absolute Return 2 £221 million 1
£256 million Other
£ Corporate Bond 3 £114 million 2
£251 million Fixed Income
Short Term Money Market 4 £101 million 6
£116 million Money Market
UK Gilts 5 £86 million 5
£127 million Fixed Income

RETAIL DISTRIBUTION

In June, gross retail sales for UK fund platforms totalled £7.8 billion, representing a market share of 48.7% (48.8% in June 2015).

Other Intermediaries including UK IFAs and Wealth Managers attracted gross retail sales of £3.8 billion, representing a market share of 23.6% (19.5% in June 2015).

Direct gross retail sales in June were £1.3 billion, representing a market share of 8.3% (10.6% in June 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 a net retail ouflow of £684 million in June.

Personal Pensions had net sales of £191 million, whereas we saw net retail outflows in Insurance Bonds (£55 million), ISAs (£124 million), and Unwrapped (£696 million).

For the same five fund platforms, funds under management as at the end of June 2016 were £204 billion, compared with £193 billion a year earlier.

ISAs**

In June 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 £464 million.

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

  • 1. Mixed Investment 20-60% Shares (£59 million net sales)
  • 2. Short Term Money Market (£29 million net sales)
  • 3. UK Gilts (£20 million net sales)

FUND OF FUNDS

Funds of funds saw a net retail outflow of £303 million in June 2016.

Funds of funds invested into the same firm’s funds saw a net outflow of £105 million, compared to an outflow of £198 million in funds of funds that invest externally.

Funds under management for funds of funds were £110 billion at the end of June 2016, accounting for 11.6% of industry funds under management, compared with 11.0 % in June 2015.

TRACKER FUNDS


Tracker funds saw net retail sales of £47 million with funds under management of £126 billion as at the end of June 2016. Their overall share of industry funds under management was 12.0%, compared with 10.2% in June 2015.

ETHICAL FUNDS

Net retail sales of ethical funds were £33 million in June 2016. Funds under management were £10.7 billion at the end of June, representing a 1.0% share of industry funds under management.

-ENDS-

For further information, please contact:

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

Notes for Editors

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.

* 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.