You are here: Home - Investing - Experienced Investor - News -

Brexit and Trump effect saw fund sales collapse in 2016

Written by:
Sales of investment funds fell by £12bn year-on-year in 2016 as nervous investors adopted a more cautious approach in light of the Brexit vote and Trump’s win.

In what was described as an “extraordinary and challenging geopolitical year”, net fund sales reached just £4.7bn, down from £16.8bn in 2015, according to figures from the Investment Association.

Equity funds were hit particularly hard, with net outflows of £8.2bn in 2016, compared to being the top-selling asset class a year earlier with net retail sales of £7.8bn.

The Targeted Absolute Return sector was the best-seller, attracting net sales of £5.1bn, while fixed income was the second best-selling asset class, drawing in £3.8bn. This followed outflows of £2.1bn in 2015.

Ryan Hughes, head of fund selection at broker AJ Bell, said: “Investors moved to take risk out of their portfolios and piled into sectors that offer protection from falling share prices.  Unfortunately, this nervousness proved unfounded as both the UK and US markets have hit record highs since then, showing how important it is to take a long-term approach to stock market investing.”

UK and European equities were particularly out of favour as investors turned to global equity funds for more diverse exposure to stock markets.

Property funds were also hit hard leading to the well-documented suspensions of many of them.

Chris Cummings, chief executive of the Investment Association, 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.

“Funds run by our members for UK investors grew by more than £100 billion in 2016, representing a significant contribution to people’s wealth and pensions, as well as the UK economy as a whole.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week