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Continued investor confidence pushes fund flows to £4.4 billion in November

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

  • Funds Under Management at £1.2 trillion for November 2017
  • Fixed Income was the best-selling asset class with net retail sales of over £2 billion
  • £ Strategic Bond sector remained the best-selling sector with £1.5 billion of new retail money

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

“UK retail investors showed continued confidence in the investment funds industry in November. Although slightly lower than in previous months, net retail sales were once again strong at £4.4 billion.”

Alastair Wainwright, Fund Market Specialist of The Investment Association, said:

“UK investors preferred fixed income funds in November, despite the Bank of England raising base rates by 0.25%. For the sixth month in a row, Fixed Income was the best-selling asset class with net retail sales of over £2 billion. The £ Strategic Bond sector remained the best-selling sector with £1.5 billion of new retail money.

Mixed Asset was the second best-selling asset class with £1.2 billion of net retail sales and within that the Mixed Investment 20-60% Shares sector took in £305 million.

UK investors allocated £713 million in Equity funds with the Europe ex UK and Global sectors growing most with £291 million and £205 million in net retail sales, respectively. Japanese equities were also popular with UK retail investors, as they have been throughout 2017; Japan was the third best-selling equity sector in November.

Tracker funds experienced net retail sales of £171 million in November - the lowest monthly net flow into those products since July 2016 when there was an outflow. Sales flows into Fixed Income trackers were seemingly more sensitive to the interest rate rise in November with just £89 million of net retail sales, this follows net retail sales of £53 million in October. Equity trackers experienced a net retail outflow of £139 million, whereas Mixed Asset trackers took in £235 million of new retail money.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under Management Net Retail Sales Net Institutional Sales
November 2017

£1.2 trillion

£4.4 billion

-£449 million

November 2016

£1 trillion

£1.8 billion

£2.1 billion

ASSET CLASSES

Fixed Income was the best selling asset class with £2 billion in net retail sales.

Mixed Asset was the second best-selling asset class with £1.2 billion in net retail sales.

Equity was the third best-selling asset class with net retail sales of £713 million.

Money Market was the fourth best-selling asset class with net retail sales of £203 million.

Funds classified as Other experienced an inflow of £128 million - this includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors. Property funds experienced an inflow of £96 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Europe funds were the best-selling in November with net retail sales of £348 million.

Asia funds were the next best-selling with net retail sales of £229 million.

Japan funds were the third best-selling with net retail sales of £213 million.

North America funds saw net retail sales of £45 million.

Global and UK funds experienced net retail outflows of £4 million and £188 million respectively.

Region Net retail sales
in November 2017
Average net retail sales
for previous 12 months
Europe

£348 million

£153 million

Asia

£229 million

-£53 million
Japan

£213 million

£124 million

North America

£45 million

£137 million
Global

-£4 million

£548 million
UK

-£188 million

-£161 million

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

The five best-selling Investment Association sectors for November 2017 were:

  • £ Strategic Bond was the best-selling sector with net retail sales of £1.5 billion.
  • Mixed Investment 20-60% Shares with net retail sales of £305 million.
  • Europe excluding UK with net retail sales of £291 million.
  • Mixed Investment 40-85% Shares with net retail sales of £255 million.
  • Global with net retail sales of £205 million.

The worst-selling Investment Association sector in November 2017 was the Specialist sector with an outflow of £444 million.

Investment Association Sector

Ranking in November
2017

Net Retail Sales

in November 2017

Ranking in
October 2017

Net Retail Sales
in October 2017

Asset Class

£ Strategic Bond

1

£1.5 billion

1

£1.6 billion

Fixed Income

Mixed Investment 20-60% Shares

2

£305 million

8

£177 million

Mixed Asset

Europe excluding UK

3

£291 million

9

£171 million

Equity

Mixed Investment 40-85% Shares

4

£255 million

5

£224 million

Mixed Asset

Global

5

£205 million

3

£345 million

Equity

RETAIL DISTRIBUTION

In November, gross retail sales for UK fund platforms totalled £9.6 billion, representing a market share of 39.8% (43.6% in November 2016).

Other Intermediaries including UK IFAs and Wealth Managers made gross retail sales of £8.2 billion, representing a market share of 34.1% (22.2% in November 2016).

Direct gross retail sales in November were £1.6 billion, representing a market share of 6.6% (11.8% in November 2016).

FUND PLATFORM PRODUCT SALES

The five fund platforms that provide data to The Investment Association (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) saw net retail sales of £1.5 billion in November.

Personal Pensions had net sales of £993 million, Unwrapped £485 million and Insurance Bonds £31 million, whilst ISAs saw a net inflow of £28 million.

For the same five fund platforms, funds under management as at the end of November 2017 were £255 billion, compared with £219 billion a year earlier.

ISAs**

In November 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 a net retail outflow of £167 million.

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


  • Global (£36 million net sales)
  • Mixed Investment 40-85% Shares (£23 million net sales)
  • Mixed Investment 20-60% Shares (£20 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £860 million in November.

Funds of funds that invested externally saw net retail sales of £551 million, while funds that invested internally saw net retail sales of £309 million.

Funds under management for funds of funds were £150 billion at the end of November 2017, accounting for 12.6% of industry funds under management, compared with 11.9% in November 2016.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £171 million. Tracker funds under management stood at £161 billion as at the end of November 2017. Their overall share of industry funds under management was 13.5%, compared with 12.9% in November 2016.

ETHICAL FUNDS

Net retail sales of ethical funds were £97 million in November 2017. Funds under management were £15 billion at the end of November, representing a 1.3% share of industry funds under management.

-ENDS-

For further information, please contact:


Helen Ayres
Media Relations Manager
Helen.Ayres@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 IA champions UK asset management, supporting British savers, investors and businesses. Our 250 members manage £6.9 trillion of assets and employ 93,500 people 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.