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ISA season kicks off with £620 million invested

Thursday 03 May 2018

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

  • Net retail sales positive in March with an additional £1.5 billion invested into UK authorised funds.
  • In March, ISA sales turned positive for the first time in seven months at £363 million, with an additional £256 million in the first 5 days of April as investors sought to use their 2017/18 ISA allowance.
  • Mixed Asset was the best-selling asset class amongst retail investors again with £890 million in net retail sales.

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

“The start of the ISA season kicked off in March with a total of £620 million invested into ISAs throughout this month and into the first five days of April, leading up to the end of the 2017-18 tax year.

“ISAs offer a flexible way to save for many UK consumers and with an additional £23 million being placed into ISAs in comparison with the same period last year it is positive to see growth in this high-street investment product.”

Alastair Wainwright, Fund Market Specialist, said:

“Mixed Asset was the best-selling asset class amongst retail investors again with £890 million in net retail sales. Equity funds collectively saw an inflow of £554 million, helped by the best-selling Global sector (£463 million). Fixed income saw an outflow for the second month in a row (-£309 million) as investors stopped allocating to the Sterling Strategic Bond sector.

"Despite positive net retail sales, funds under management fell by 2% due to market movements. Concerns about a trade war between the US and some of its closest trading partners, including China and the EU, led to negative returns in equity markets and some bond markets. The IA North America sector was the worst performing in March (-5.1%), followed by Technology and Telecommunications (-5.0%) and the China/Greater China sector (-4.4%). The UK Gilts sector was the best performing (2.3%) as fiscal year end investment activity pushed longer dated government bond yields down.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under Management Net Retail Sales Net Institutional Sales
March 2018 £1.2 trillion £1.5 billion £371 million
March 2017 £1.1 trillion £4.6 billion £3.5 billion

ASSET CLASSES

Mixed Asset was the best selling asset class with £890 million in net retail sales.

Equity was the second best-selling asset class with £554 million in net retail sales.

Funds classified as Other were the third best-selling asset class with net retail sales of £395 million. This includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors.

Property experienced a net retail inflow of £69 million

Money Market and Fixed Income experienced outflows of £113 million and £309 million respectively.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Asia funds were the best-selling in March with net retail sales of £232 million.

North America funds were the next best-selling with net retail sales of £183 million.

Japan funds were the third best-selling with net retail sales of £163 million.

Europe and Global funds saw net retail inflows of £131 million and £53 million respectively.

UK funds experienced net retail outflows of £466 million.


Region Net retail sales
in March 2018
Average net retail sales
for previous 12 months
Asia £232 million £57 million

North America

£183 million £109 million
Japan £163 million £173 million
Europe £131 million £315 million
Global £53 million £472 million
UK -£466 million -£245 million

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

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


  • Global was the best-selling sector with net retail sales of £462 million.
  • Mixed Investment 40-85% Shares with net retail sales of £336 million.
  • Mixed Investment 20-60% Shares with net retail sales of £251 million.
  • Asia Pacific Excluding Japan with net retail sales of £239 million.
  • Volatility Managed with net retail sales of £198 million.
The worst-selling Investment Association sector in March 2018 was UK All Companies with an outflow of £432 million.

Investment Association Sector Ranking in March 2018 Net Retail Sales
in March 2018
Ranking in
Feb 2018
Net Retail Sales
in Feb 2018
Asset Class
Global 1 £462 million 11 £50 million Other
Mixed Investment 40-85% Shares 2 £336 million 3 £239 million Mixed Asset

Mixed Investment 20-60% Shares

3 £251 million 2 £258 million Mixed Asset
Asia Pacific Excluding Japan 4 £239 million 5 £183 million Equity
Volatility Managed 5 £198 million 6 £131 million Other

RETAIL DISTRIBUTION

In March, gross retail sales for UK fund platforms totalled £9.5 billion, representing a market share of 40.9% (45.5% in March 2017).

Other Intermediaries including UK IFAs and Wealth Managers made gross retail sales of £6.6 billion, representing a market share of 28.4% (21.2% in March 2017).

Direct gross retail sales in March were £2.3 billion, representing a market share of 9.9% (8.6% in March 2017).

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 March.

Personal Pensions had net sales of £888 million, ISAs £494 million, whilst Insurance Bonds and Unwrapped saw a net outflows of £12 million and £72 respectively.

For the same five fund platforms, funds under management as at the end of March 2018 were £255 billion, compared with £237 billion a year earlier.

ISAs**

In March 2018, 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 inflow of £363 million.

The three best-selling sectors for ISAs based on the five fund platforms were:
  • Global (£98.5 million net sales)
  • Mixed Investment 40-85% Shares (£72 million net sales)
  • Mixed Investment 20-60% Shares (£50.2 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £614 million in March.

Funds of funds that invested externally saw net retail sales of £394 million, while funds that invested internally saw net retail sales of £221 million.

Funds under management for funds of funds were £151 billion at the end of March 2018, accounting for 12.8% of industry funds under management, compared with 12.2% in March 2017.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £820 million. Tracker funds under management stood at £163 billion as at the end of March 2018. Their overall share of industry funds under management was 13.8%, compared with 13.7% in March 2017.

ETHICAL FUNDS

Ethical funds experienced net retail inflows of £138 million in March 2018. Funds under management were £15.2 billion at the end of March, 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 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 IA champions UK asset management, supporting British savers, investors and businesses. Our 240 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.