What are you looking for?

Net retail outflows as investors react to Brexit uncertainty

Thursday 4 October 2018

The Investment Association’s monthly statistics of UK investor behaviour in August 2018 show:
  • Net retail sales were negative in August, with £217 million of outflows from UK authorised and recognised funds.
  • Europe and UK equity funds experienced net retail outflows of £303 million and £429 million respectively. North America equity funds experienced net retail inflows of £98 million.
  • Global was the best-selling sector with net retail sales of £417 million.

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

“The uncertainty in the Brexit negotiations continued to be a key factor denting investor confidence in August, with funds experiencing the first retail outflows since the EU referendum result. UK equities remain firmly out of favour, with European equities also experiencing another month of outflows. As the March 2019 Brexit deadline looms, investors are seeking to diversify and manage their risk with global and mixed asset funds attracting strong inflows, as did Volatility Managed funds.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under ManagementNet Retail SalesNet Institutional Sales
August 2018£1.3 trillion-£217 million-£351 million
August 2017£1.2 trillion£4.6 billion£1.4 billion
ASSET CLASSES


Mixed Asset was the best-selling asset class with £539 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 £36 million.

In August, all other asset classes experienced outflows.

Property experienced a net retail outflow of £28 million.

Fixed Income experienced outflows of £164 million, followed by Money Market, which experienced outflows of £292 million in net retail sales.

Equity experienced a net retail outflow of £308 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global funds were the best-selling in August with net retail sales of £193 million.

North America funds were the next best-selling with net retail sales of £98 million.

Japan funds were the third best-selling with net retail sales of £25 million.

Asia funds experienced net retail inflows of £18 million, whilst Europe and UK funds experienced net retail outflows of £303 million and £429 million, respectively.

RegionNet retail

sales
in August 2018

Average net

retail sales for previous 12 months

Global£193 million£314 million
North America£98 million£127 million
Japan£25 million£160 million
Asia£18 million£138 million
Europe-£303 million£172 million
UK-£429 million-£384 million

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

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

  • Global was the best-selling sector with net retail sales of £417 million.
  • Mixed Investment 40-85% Shares with net retail sales of £304 million.
  • Volatility Managed with net retail sales of £183 million.
  • £ Corporate Bond with net retail sales of £126 million.
  • Mixed Investment 20-60% Shares with net retail sales of £102 million.

The worst-selling Investment Association sector in August 2018 was UK All Companies with an outflow of £356 million.

Investment

Association Sector

Ranking in August 2018Net retail sales in August 2018Ranking in July 2018Net retail sales in July 2018Asset Class
Global1£417 million1£397 millionEquity
Mixed Investment 40-85% Shares2£304 million2£271 millionMixed Asset
Volatility Managed3£183 million3£176 millionOther
£ Corporate Bond4£126 million7£114 millionFixed Income
Mixed Investment 20-60% Shares5£102 million11

£48 million

Mixed Asset

RETAIL DISTRIBUTION

In August, gross retail sales for UK fund platforms totalled £8.5 billion, representing a market share of 43.3% (40.8% in August 2017).

Other Intermediaries including UK IFAs made gross retail sales of £5.2 billion, representing a market share of 26.8% (30.1% in August 2017).

Direct gross retail sales in August were £1.5 billion, representing a market share of 7.6% (7.2% in August 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 sales of £805 million in August.

Personal Pensions had net sales of £538 million, Unwrapped £157 million, ISAs £112 million while Insurance Bonds saw a net outflow of £2 million.

For the same five fund platforms, funds under management as at the end of August 2018 were £282 billion, compared with £252 billion a year earlier.

ISAs**

In August 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 £111 million.

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

  • Global (£87.5 million net sales)
  • Mixed Investment 20-60% Shares (£67.3 million net sales)
  • Mixed Investment 40-85% Shares (£43.7 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £525 million in August.

Funds of funds that invested externally saw net retail sales of £197 million, while funds that invested internally saw net retail sales of £328 million.

Funds under management for funds of funds were £157 billion at the end of August 2018, accounting for 12.4% of industry funds under management, compared with 12.2% in August 2017.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £736 million. Tracker funds under management stood at £193 billion as at the end of August 2018. Their overall share of industry funds under management was 15.3%, compared with 14.5% in August 2017.

ETHICAL FUNDS

Ethical funds experienced net retail inflows of £91 million in August 2018. Funds under management were £17 billion at the end of August, 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 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.