Purchases of investment companies on adviser platforms grew 1% in 2022 compared to a 7% drop in purchases of all products finds new AIC research, as they highlight net demand for investment companies having jumped 48% to reach all-time high
Purchases of investment companies on adviser platforms reached a record high of £1.31 billion in 2022, representing growth of 1% on the previous year, according to data compiled for the Association of Investment Companies (AIC) by ISS Financial Clarity.
This was in the context of a general decline in purchases of all products on adviser platforms. Overall purchases in 2022 fell 7% to £183.82 billion, the biggest year-on-year fall since the AIC’s records began in 2011.
Net demand for investment companies jumped from £320 million to an all-time high of £474 million, an increase of 48%.
Popular sectors
Driving the positive net demand figure was the Flexible Investment sector, which accounted for 16% of all purchases of investment companies in 2022. The sector is home to investment companies that can invest in a mix of different assets, some of which aim to preserve investors’ capital in more difficult markets.
The second most popular sector by net demand in 2022 was UK Smaller Companies, which jumped from 26th place in 2021. This was despite a widening of the average discount in the sector from 8% to 11%1.
The Global sector ranked third by net demand, followed by Renewable Energy Infrastructure and Infrastructure.
Nick Britton(pictured), Head of Intermediary Communications at the Association of Investment Companies (AIC), commented: “Last year, investment companies saw their discounts widen in difficult markets, but this does not appear to have dampened demand from financial advisers and wealth managers. The jump in popularity of the UK Smaller Companies sector suggests that the deeper discounts on offer may have attracted some bargain hunters. “The big picture is that demand for investment companies has remained resilient against a backdrop of declining platform purchases overall. Tough markets will always hit share prices and deepen discounts, but advisers are clearly looking beyond that to the strong long-term record of many investment companies and their ability to bounce back when markets
