UK retail fund sales slowed in 2016

Net retail fund sales in the UK slowed down last year, The Investment Association (IA) reports, though assets under management increased.

A surge in retail sales in December meant the final month of the year was responsible for the majority – £2.7 billion (€3.2 billion) – of the £4.7 billion total net retail sales.

Overall, funds under management increased by £117 billion in the year. Targeted Absolute Return was the best-selling sector with net retail sales of £5.1 billion.

Although tracker funds under management hit their highest level ever in the UK at £141 billion, sales fell from £6.7 billion in 2015, to £4.9 billion.

Chris Cummings, chief executive of the IA, said: "Despite a slowdown in net retail sales in what was an extraordinary and challenging geo-political year, the UK asset management industry continued to grow strongly and provide value to investors, savers and pensioners across the world.”

Despite global stock markets performing well over the year, retail investors sold out of equity funds, the IA said. Property funds also suffered as advisers and wealth managers moved away from the sector.

Net retail sales of ethical funds were £807 million in 2016, the highest on record. Funds under management were £12.4 billion at the end of 2016, representing a 1.2% share of industry funds under management.

Funds held by UK investors grew to a record £1.045 trillion at the end of 2016, a 12.6% increase through the year. Fund performance contributed £104 billion of this growth, whilst net sales – which includes non-retail sources – contributed £13 billion.

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