UK fund sales show signs of recovery led by mixed assets

Big_BenInvestment fund sales in the UK are showing signs of rebounding from the doldrums of January and the slowdown last year.

Net retail sales were £2.2 billion in February – up from a revised £371 million in the previous month.

Last year, retail fund sales slowed down in the UK, though there was a resurgence in December to £2.7 billion, before falling again in January to under half a billion pounds.

In the three-month period around the Brexit referendum (May, June, July 2016) UK-based retail investors reduced their allocation to funds by £3.8 billion – but since then more than £10 billion has been invested by retail customers in UK authorised funds, the Investment Association (IA) said.

‘Mixed asset’ was the best-selling asset class in January with net retail sales of £813 million, while similar strategies that allocate between different types of assets in the bond sector helped make fixed income funds overall the second strongest sellers.

The IA’s fund market specialist, Alastair Wainwright, said the demand for allocation funds showed “the value that UK investors place on professional asset allocation skills during challenging economic times”.

He added: “Equities proved to be less popular in February with gross retail sales of £7.4 billion into equity funds countered by near equivalent outflows…”.

This resulted in net retail sales of just £1 million. The highest ranking equity sector was ‘global’.

Institutional investors invested £1.7 billion in UK-authorised investment funds in February.

Both retail and institutional sales have picked up from the year-ago figure. For retail the £2.2 billion sales in February 2017 compares to £210 million in February 2016; for institutions the £1.7 billion net flow compares to £193 million last year.

Germany recently reported a strong start to the year for retails sales.

In a similar sign of optimism for the industry, Ucits sales in Europe for January were today reported to have been at a record level.

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