04.02.2020

Savers Diversify In Early Response To Coronavirus

UK savers invested £1.4 billion in retail funds in February 2020 according to latest figures published today by the Investment Association (IA).

  • Net retail sales held stable at £1.4 billion in February.
  • Mixed Asset funds were the best-selling asset class in February, with £711 million in net retail sales.
  • Volatility Managed was the best selling IA sector in February, with £888 million in net retail sales.
  • Responsible investment funds continued to grow in popularity, with £735 million in net retail sales, in a second consecutive month of record inflows.

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

“Despite the growing global impact of coronavirus on economic activity, February in the fund market didn’t reveal any dents in investor confidence, as savers put £1.4 billion into funds across the month. However, caution was definitely in the air and savers top preference was for diversified funds, with Mixed Asset funds attracting £711 million.

“Few in February could have predicted the impact of a spate of lockdowns on global capital markets, or the extraordinary raft of measures from governments and central banks to help shore up economies around the world. It remains to be seen just how significantly steep market falls have affected investor behaviour in March.”

BEST SELLING INVESTMENT ASSOCIATION SECTORS  

The five best-selling Investment Association sectors for February 2020 were:

  1. Volatility Managed was first with net retail sales of £888 million.
  2. Mixed Investment 40-85% Shares was second with net retail sales of £355 million.
  3. £ Corporate Bond followed with net retail sales of £295 million.
  4. UK Gilts was fourth with net retail sales of £247 million.
  5. Global was fifth with net retail sales of £206 million.

The worst-selling Investment Association sector in February 2020 was £ Strategic Bond with an outflow of £664 million.

NET RETAIL SALES BY ASSET CLASS

Mixed Asset was the best-selling asset class in February 2020 with £711 million in net retail sales.

Money Market was the second best-selling asset class with £473 million of inflows.

Other (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) was the third best-selling asset class with £422 million in net retail sales.

Property was next with £52 million in net retail sales.

Fixed Income experienced net retail outflows of £96 million, while Equity experienced net retail outflows of £210 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global was the best selling equity fund region in February 2020, with net retail sales of £230 million.

North America funds were the second best selling with net retail sales of £82 million.

All other equity fund regions experienced outflows.

Japan funds saw net retail outflows of £46 million in February.

Europe funds experienced net retail outflows of £57 million, while Asia funds saw net retail sales of £61 million.

UK funds experienced net retail outflows of £564 million.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £1.6 billion in February 2020. Tracker funds under management stood at £220 billion as of the end of February. Their overall share of industry funds under management was 17.5%.

RESPONSIBLE INVESTMENT FUNDS

Responsible investment funds saw a net retail inflow of £735 million in February 2020. Responsible investment funds under management stood at £28 billion as of the end of February. Their overall share of industry funds under management was 2.2%.

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL

In February, gross retail sales for UK fund platforms totalled £12.3 billion, representing a market share of 49%.

Gross retail sales through Other UK Intermediaries including IFAs were £6.7 billion, representing a market share of 26%.

Direct gross retail sales in February were £2.3 billion, representing a market share of 9%.

Source: IA

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