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Net sales hit a record breaking £63 billion in 2017

Thursday 08 February 2018

The Investment Association’s monthly statistics of UK investor behaviour in December 2017 show:
  • 2017 was a record breaking year with net sales into UK authorised funds reaching £63 billion
  • Funds under management ended the year at an unprecedented £1.2 trillion
  • Fixed Income had its best-selling year and was the best-selling asset class in 2017, with a total of £14.3 billion in net retail sales.

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

“The high monthly net retail sales seen throughout 2017 continued in December as UK retail investors allocated £3.7 billion of new money into our industry.

Altogether, 2017 was a record breaking year for IA members with funds under management reaching an unprecedented £1.2 trillion. This was an increase of £181 billion from the previous year, with £63 billion coming through net sales and £118 billion through investment growth, equivalent to a 10% return to investors.

Notably, over £1 billion of net retail money flowed into ethical funds, the highest annual inflow into this type of fund. As sustainable investment becomes an increasing priority for today’s investors, the IA will be launching a Sustainability and Responsible Investment Policy Group to provide a hub for investor leadership to further promote sustainable investment in our industry”

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

“Fixed Income was the best-selling asset class in 2017, which was also its best-selling year, with a total of £14.3 billion in net retail sales. More than half of this went into the £ Strategic Bond sector, which attracted £7.5 billion from UK retail investors and was the best-selling IA sector.

Mixed Asset funds ended 2017 with a bang after receiving £1.7 billion in December - their highest net retail monthly inflow ever. This brought net retail sales to £13.5 billion over the last year. The Mixed Investment 40-85% Shares and 20-60% Shares sectors took in £2.8 billion and £2.5 billion in 2017, respectively, whilst £5.8 billion was invested in Mixed Asset category within the IA Unclassified sector.

Equity funds experienced net retail sales of £10.5 billion, a significant improvement on 2016’s outflow of £8.5 billion. Global was the best-selling sector within equity and second best-selling IA sector altogether, having received £4 billion in new retail money. UK Equity funds on the other hand continued to be unpopular with UK retail investors throughout 2017 as they experienced an outflow of £2.6 billion.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under Management Net Retail Sales Net Institutional Sales
December 2017 £1.2 trillion £3.7 billion £2.1 billion
December 2016 £1.1 trillion £2.7 billion £1.7 billion

ASSET CLASSES

Mixed Asset was the best selling asset class with £1.7 billion in net retail sales.

Fixed Income was the second best-selling asset class with £979 million in net retail sales.

Equity was the third best-selling asset class with net retail sales of £426 million.

Funds classified as Other was the fourth best-selling asset class with net retail sales of £414 million - this includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors.

Property funds experienced an inflow of £117 million. Money Market experienced an inflow of £77 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global funds were the best-selling in December with net retail sales of £340 million.

Europe funds were the next best-selling with net retail sales of £297 million.

Japan funds were the third best-selling with net retail sales of £180 million.

Asia funds saw net retail sales of £112 million.

North America and UK funds experienced net retail outflows of £156 million and £202 million respectively.


Region Net retail sales
in December 2017
Average net retail sales
for previous 12 months
Global £340 million £511 million

Europe

£297 million £196 million
Japan £180 million £133 million
Asia £112 million -£22 million
North America -£156 million £120 million
UK -£202 million -£189 million

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

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

  • Global was the best-selling sector with net retail sales of £382 million.
  • £ Strategic Bond with net retail sales of £333 million.
  • Europe Excluding UK with net retail sales of £277 million.
  • Mixed Investment 20-60% Shares with net retail sales of £275 million.
  • £ Corporate Bond with net retail sales of £256 million.

The worst-selling Investment Association sector in December 2017 was the North America sector with an outflow of -£139 million.

Investment Association Sector Ranking in December
2017
Net Retail Sales
in Dec 2017
Ranking in
Nov 2017
Net Retail Sales
in Nov 2017
Asset Class
Global 1 £382 million 5 £206 million Equity
£ Strategic Bond 2 £333 million 1 £1.5 billion Fixed Income
Europe Excluding UK 3 £277 million 3 £291 million Equity
Mixed Investment 20-60% 4 £275 million 2 £305 million Mixed Asset
£ Corporate Bond 5 £256 million 11 £139 millionFixed Income

RETAIL DISTRIBUTION

In December, gross retail sales for UK fund platforms totalled £7.6 billion, representing a market share of 36.8% (47.6% in December 2016).

Other Intermediaries including UK IFAs and Wealth Managers made gross retail sales of £7.5 billion, representing a market share of 36.1% (22.5% in December 2016).

Direct gross retail sales in December were £1.4 billion, representing a market share of 6.7% (8.1% in December 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 £1.3 billion in December.

Personal Pensions had net sales of £685 million, Unwrapped £495 million and Insurance Bonds £48 million, whilst ISAs saw a net inflow of £91 million.

For the same five fund platforms, funds under management as at the end of December 2017 were £260 billion, compared with £226 billion a year earlier.

ISAs**

In December 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 £36 million. The three best-selling sectors for ISAs based on the five fund platforms were:
  • Global (£30.5 million net sales)
  • Mixed Investment 20-60% Shares (£27.8 million net sales)
  • Asia Pacific Excluding Japan (£17.9 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £798 million in December.

Funds of funds that invested externally saw net retail sales of £480 million, while funds that invested internally saw net retail sales of £318 million.

Funds under management for funds of funds were £153 billion at the end of December 2017, accounting for 12.6% of industry funds under management, compared with 12% in December 2016.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £103 million. Tracker funds under management stood at £165 billion as at the end of December 2017. Their overall share of industry funds under management was 13.5%, compared with 13% in December 2016.

ETHICAL FUNDS

Net retail sales of ethical funds were £151 million in December 2017. Funds under management were £15.4 billion at the end of December, representing a 1.3% share of industry funds under management.

-ENDS-

For further information, please contact:

Victoria Jonson, Interim Head of Communications: victoria.jonson@theia.org
T +44 (0)20 7269 4696

Helen Ayres, Media Relations Manager: helen.ayres@theia.org
T +44 (0)20 7269 4696, M +44 7508 724066

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 £5.7 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.