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Savers diversify with continued inflows into mixed asset & global equity funds

Thursday 1 November 2018

The Investment Association’s monthly statistics of UK investor behaviour in September 2018 show:

  • Net retail sales were positive in September, with £642 million of inflows from UK authorised and recognised funds, and funds under management totalling £1.3 trillion.
  • Europe and UK equity funds continued to experience net retail outflows of £58 million and £329 million, respectively.
  • Mixed Investment 40-85% Shares was the best-selling sector with net retail sales of £268 million.

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

“Uncertainty continues to be a driving factor for investors, with global and mixed asset funds benefiting, as savers look to diversify and manage their risk. September saw net retail sales bounce back into positive figures, however UK equities continue to remain firmly out of favour, with European equities experiencing a fifth consecutive month of outflows.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under ManagementNet Retail SalesNet Institutional Sales
September 2018£1.3 trillion£642 million-£588 million
September 2017£1.2 trillion£5.8 billion£17 million

ASSET CLASSES

Mixed Asset was the best-selling asset class with £418 million in net retail sales.

Funds classified as Other (which includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors) were the second best-selling asset class with net retail sales of £75 million.

Equity was the third best-selling asset class with net retail sales of £63 million.

Money Market experienced a net retail inflow of £38 million.

Fixed Income experienced inflows of £35 million, followed by Property, which experienced inflows of £13 million in net retail sales.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

North America funds were the best-selling in September with net retail sales of £204 million.

Global funds were the next best-selling with net retail sales of £141 million.

Japan funds were the third best-selling with net retail sales of £129 million.

Asia funds experienced net retail inflows of £86 million, whilst Europe and UK funds experienced net retail outflows of £58 million and £329 million, respectively.

RegionNet retail sales

in September 2018

Average net retail sales for previous 12 months
North America£204 million£115 million
Global£141 million£287 million
Japan£129 million£150 million
Asia£86 million£136 million
Europe-£58 million£100 million
UK-£329 million-£406 million

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

The five best-selling Investment Association sectors for September 2018 were:

1. Mixed Investment 40-85% Shares was the best-selling sector with net retail sales of £268 million.

2. Global with net retail sales of £236 million.

3. North America with net retail sales of £181 million.

4. Volatility Managed with net retail sales of £172 million.

5. UK Gilts with net retail sales of £141 million.

The worst-selling Investment Association sector in September 2018 was UK All Companies with an outflow of £391 million.

Investment Association SectorRanking in September 2018Net retail sales in September 2018Ranking in August 2018Net retail sales in August 2018Asset Class
Mixed Investment 40-85% Shares1£268 million2£304 millionMixed Asset
Global2£236 million1£417 millionEquity
North America3£181 million10£62 millionEquity
Volatility Managed4£172 million3£183 millionOther
UK Gilts5£141 million6£92 millionFixed Income

RETAIL DISTRIBUTION

In September, gross retail sales for UK fund platforms totalled £8.2 billion, representing a market share of 47.2% (43.9% in September 2017).

Other Intermediaries including UK IFAs made gross retail sales of £4.2 billion, representing a market share of 24.4% (27.6% in September 2017).

Direct gross retail sales in September were £1.5 billion, representing a market share of 8.6% (7.9% in September 2017).

FUND PLATFORM PRODUCT SALES

The five fund platforms that provide data to The Investment Association (AEGON, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) saw net outflows of £110 million in September.

Personal Pensions had net sales of £453 million, Insurance Bonds £6 million, ISAs £1 million while Unwrapped saw a net outflow of £569 million.

For the same five fund platforms, funds under management as of the end of September 2018 were £280 billion, compared with £252 billion a year earlier.

ISAs**

In September 2018, funds in ISAs provided by fund companies and the five fund platforms that feed data to The Investment Association (AEGON, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) saw a net retail outflow of £197 million.

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

1. Global (£56.2 million net sales)

2. Mixed Investment 40-85% Shares (£28.5 million net sales)

3. Volatility Managed (£20.5 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £469 million in September.

Funds of funds that invested externally saw net retail sales of £171 million, while funds that invested internally saw net retail sales of £298 million

Funds under management for funds of funds were £158 billion at the end of September 2018, accounting for 12.5% of industry funds under management, compared with 12.3% in September 2017.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £1.1 billion. Tracker funds under management stood at £194 billion as of the end of September 2018. Their overall share of industry funds under management was 15.4%, compared with 14.5% in September 2017.

ETHICAL FUNDS

Ethical funds experienced net retail inflows of £80 million in September 2018. Funds under management were £17 billion at the end of September, representing a 1.3% share of industry funds under management.

-ENDS-

For further information, please contact:

Anisha Patel, Head of Communications: Anisha.Patel@theia.org

T +44 (0)20 7269 4635

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 sector level reporting of IA statistics from September onwards feature a number of differences resulting from changes to both IA sectors themselves and the presentation of data.

Sectors Changes

  • The Personal Pensions, Property and Protected Sectors have been closed. Two new sectors, UK Direct Property and Property Other, have been created from the former Property sector.

Reporting Changes

  • Specialist – Funds with the Specialist Sector have been assigned to asset class based sub-sectors. For the purposes of asset class based reporting (Tables 5 and 7) the Specialist Sector will be split according to asset class. This change has been applied retroactively to historical data, and has not resulted in any funds entering or leaving the sector.
  • Unallocated funds – Previously IA reporting had combined the Unclassified Sector with funds that had not been classified to any sector but which provide data purely for the purposes of IA statistical reporting. From September onwards these will be split into the Unclassified Sector and Unallocated funds (which are outside the sectors system). Unallocated funds have been grouped by asset class for the purposes of reporting at an asset class level, but do not form a sector. This change has also been applied retroactively to historical data.

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:

AsiaEuropeGlobalJapanNorth AmericaUK
Asia Pacific excl. JapanEurope excl. UKGlobalJapanNorth AmericaUK All Companies
Asia Pacific incl. JapanEurope incl. UKGlobal Emerging MarketsJapanese Smaller CompaniesNorth America Smaller CompaniesUK Equity Income
China/Greater ChinaEurope Smaller CompaniesGlobal Equity IncomeUK 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 (AEGON, 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 £7.7 trillion of assets and employ 100,000 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 35% of all assets managed in Europe.