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Equity fund sales outstrip bonds for first time in year – IMA

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30/10/2012
The IMA’s latest sales figures show investors are returning to risk assets, as net retail sales of equities outstripped fixed income funds for the first time in a year.
Equity fund sales outstrip bonds for first time in year – IMA

September sales figures published by the Investment Management Association showed equities were the most popular asset class over the month, with net retail sales of £541m.

This is far ahead of its average figure over the last 12 months of a £65m outflow. It is also the first time any asset class has surpassed fixed income in the last 12 months.

Investors have flocked to bond funds over the past year amid ongoing uncertainty in the eurozone and slowing global growth, pushing yields on the ‘safest’ developed market government bonds down to record lows.

The last time equity was the best selling asset class was in August 2011 with net retail sales of £552m. In terms of gross retail sales (new investment and switches) equity funds took a 49.9% share in September 2012, compared to an average 48.5% over the previous 12 months.

Fixed income was the second best selling asset class with net retail sales of £320m, the lowest since September 2011 (£317m). In terms of gross retail sales, fixed income funds took a 20.7% share in September 2012, compared to an average 23% over the previous 12 months.

Within equities, UK absolute return funds were the most popular, posting their best monthly sales figures for three years.

Strategic bond funds, global emerging markets, global equity income and UK equity income were the top selling sectors over the month.

Investor appetite for property is showing signs of returning, with the asset class showing the highest net retail sales since June 2011, at £82m.

Money has also begun to flow back into Europe as investors begin to dip their toes into stocks on attractive valuations. European equity funds saw their first net retail inflows since May 2011 at £150m.

In contrast, the UK was the worst selling region with a net outflow of £51m. UK All Companies has been the worst selling sector for eight out of the last 12 months.

Total funds under management for the industry over the month reached £629bn, compared to £550bn the previous year.

Jane Lowe, director of markets, said September’s sales figures showed a reversal of the outflows seen in August. “Net retail sales were again above £1bn in September, reversing the unexpected outflows seen in August.

“Overall net retail sales of equity funds outstripped fixed income for the first time in a year. Global funds took the lion’s share of these net sales, against a notable outflow from UK equity growth funds.

“However substantial inflows were seen in both UK and global equity income funds, and a focus on income was apparent in three out of the top five selling sectors.”

 

 IMA sector Ranking Sept 2012 Net retail sales Sept 2012 (£m) Ranking Aug 2012  Asset class
 Absolute Return UK  1  193  8  Specialist
 £ Strategic Bond  2  144  1  Fixed Income
 Global Emerging Markets  3  139  10  Equity
 Global Equity Income  4  137  3  Equity
 UK Equity Income  5  134  24  Equity

Source: IMA

Summary UK domiciled

FUM

Net retail sales
 Sept 2012  £629.4m  £1.1bn
 Sept 2011  £549.9m

£670.9m

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