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Equities experience third month of outflows

Thursday 06 September 2018

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


  • Net retail sales were positive in July with an additional £977 million invested into UK authorised funds, and funds under management totalling £1.3 trillion.
  • Europe, North America, and UK equity funds experienced net retail outflows of £156 million, £256 million and £315 million, respectively.
  • Global was the best-selling sector with net retail sales of £397 million.

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

“Net retail sales were positive in July as savers placed almost £1bn into UK authorised funds. However, amid trade tensions, the story remains one of equity outflows and waning risk appetite. Fixed income and mixed asset funds attracted strong inflows, as did Volatility Managed funds. Within the equity sectors, the UK is still firmly out of favour amid Brexit uncertainty, with outflows totalling £3.5 billion since the beginning of the year.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under Management Net Retail Sales Net Institutional Sales
July 2018 £1.3 trillion £977 million -£2.9 billion
July 2017 £1.2 trillion £4.1 billion £288 million

ASSET CLASSES

Mixed Asset was the best-selling asset class with £549 million in net retail sales.

Fixed Income was the second best-selling asset class with net retail sales of £279 million.

Money Market was the third best-selling asset class with net retail sales of £177 million.

Property experienced inflows of £164, followed by funds classified as Other which experienced inflows of £58 million in net retail sales (this includes the Targeted Absolute Return, Volatility Managed, Protected and Unclassified sectors).

Equity experienced a net retail outflow of £249 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global funds were the best-selling in July with net retail sales of £507 million.

Asia funds were the next best-selling with net retail sales of £72 million.

Japan funds were the third best-selling with net retail sales of £1 million.

Europe, North America, and UK funds experienced net retail outflows of £156 million, £256 million and £315 million, respectively.


Region Net retail sales
in July 2018
Average net retail sales
for previous 12 months
Global £507 million £300 million

Asia

£72 million £124 million
Japan £1 million £165 million
Europe -£156 million £214 million
North America
-£256 million £145 million
UK
-£315 million -£379 million

THE INVESTMENT ASSOCIATION SECTOR RANKINGS

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


  • Global was the best-selling sector with net retail sales of £397 million.
  • Mixed Investment 40-85% Shares with net retail sales of £270 million.
  • Volatility Managed with net retail sales of £176 million.
  • Specialist with net retail sales of £166 million.
  • Property with net retail sales of £164 million.
The worst-selling Investment Association sector in July 2018 was North America with an outflow of £293 million.

Investment Association Sector Ranking in July
2018
Net Retail Sales
in July 2018
Ranking in
June 2018
Net Retail Sales
in
June 2018
Asset Class
Global 1 £397 million1 £293 million Equity

Mixed Investment 40-85% Shares

2 £270 million 2 £282 million Mixed Asset

Volatility Managed

3 £176 million 4 £149 million Other
Specialist 4 £166 million30 -£66 million Equity
Property 5 £164 million 12 £52 millionProperty

RETAIL DISTRIBUTION

In July, gross retail sales for UK fund platforms totalled £9 billion, representing a market share of 43.1% (46.9% in July 2017).

Other Intermediaries including UK IFAs made gross retail sales of £5.9 billion, representing a market share of 28.4% (21.9% in July 2017).

Direct gross retail sales in July were £1.3 billion, representing a market share of 6.4% (7.6% in July 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 £819 million in July.

Personal Pensions had net sales of £399 million, Unwrapped £281 million, ISAs £140 million while Insurance Bonds saw a net inflow of £1 million.

For the same five fund platforms, funds under management as at the end of July 2018 were £281 billion, compared with £249 billion a year earlier.

ISAs**

In July 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 £90 million.

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

  • Global (£96.3 million net sales)
  • Mixed Investment 40-85% % Shares (£39.4 million net sales)
  • Mixed Investment 20-60% Shares (£35 million net sales)

FUND OF FUNDS

Funds of funds had a net retail inflow of £353 million in July.

Funds of funds that invested externally saw net retail sales of £172 million, while funds that invested internally saw net retail sales of £180 million.

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

TRACKER FUNDS

Tracker funds saw a net retail inflow of £640 million. Tracker funds under management stood at £192 billion as at the end of July 2018. Their overall share of industry funds under management was 15.2%, compared with 14.6% in July 2017.

ETHICAL FUNDS

Ethical funds experienced net retail inflows of £164 million in July 2018. Funds under management were £16.7 billion at the end of July, 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 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 (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 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.