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Investment Association reports fund sales of £6.2bn in April boosted by ISA contributions

Savers invested £1.5 billion into funds wrapped by ISAs in April, bringing April’s total net retail sales to £6.2 billion. In the space of a month, savers invested £79 million more into ISAs than over the previous 12 months, data published today by the Investment Association (IA) reveals. The other key findings from IA’s report for April include:

  • Tracker fund sales rebounded in April as net retail sales reached £2.9 billion compared with sales of £626 million in March.
  • Equity fund sales were the highest of any asset class at £2.9 billion and the IA’s Global sector remained the best-selling sector with net retail sales of £1.7 billion.
  • Despite inflation concerns, sales to fixed income funds remained strong – attracting £1.3 billion in net retail inflows, which is a £230 million increase on March.
  • The UK Smaller Companies inflow was the highest since the record £279m in December 2019.

Chris Cummings, Chief Executive of the Investment Association, said:

“Savers have once again shown the appeal of ISAs in helping to get into the savings habit and build up a retirement nest egg.  Comparing the strong ISA flows this April to the year before shows investors have been moving money into funds to make the most of tax incentivised savings and to deliver better returns amidst low interest rates on cash savings.

The overall inflow to UK equities for a second consecutive month follows a sustained period of outflows and points to investor confidence continuing to grow as the UK looks to leave the pandemic economic consequences behind. In particular, the rising inflows to more domestically-focused UK Smaller Companies funds shows investors are increasingly positive that the post-Brexit UK economy will grow strongly as it opens up. In another strong month for responsible investment funds, savers invested £1.6bn, taking the total inflows to £13.5 billion over the last year – representing 30% of flows into funds.”

Commenting on today’s IA data, Kate Marshall, Acting Head of Investment Analysis at Hargreaves Lansdown, said:

UK investors remain optimistic about the prospects for their home market, according to the latest industry data. A successful vaccine rollout, the reopening of the economy, and the prospect of a rebound in consumer spending means many investors are feeling more hopeful about the future. This increase in risk appetite can also be seen in the popularity of UK Smaller Companies funds, which saw the highest inflow since the record in December 2019. Smaller businesses tend to be more domestically focused than their multinational mega-cap peers and have the chance to benefit as the economy gets back on its feet.

Once again though, Global funds remain the best sellers, and their popularity currently shows no sign of slowing down. Tracker fund sales also rebounded in April, reminding us that some investors continue to favour the simplified, low-cost approach of passive investing to form at least a part of their portfolios.”

FUNDS UNDER MANAGEMENT AND NET SALES

 

Funds Under Management Net Retail Sales Net Institutional Sales
April 2021 £1.5 trillion £6.2 billion £491 million
April 2020 £1.2 trillion £3.9 billion £3.5 billion

 

BEST SELLING INVESTMENT ASSOCIATION SECTORS

The five best-selling Investment Association sectors for April 2021 were:

  1. Global was first with net retail sales of £1.7 billion.
  2. Mixed Investment 40-85% Shares was second with net retail sales of £937 million
  3. Volatility Managed followed with net retail sales of £517 million.
  4. Mixed Investment 20-60% Shares was fourth with net retail sales of £270 million.
  5. UK Gilts was fifth with net retail sales of £256 million.

The worst-selling Investment Association sector in April 2021 was Corporate Bond with an outflow of £263 million.

NET RETAIL SALES BY ASSET CLASS

Equity was the best-selling asset class, with £2.9 billion of inflows.

Mixed Asset funds were the second best-selling asset class in April 2021 with £1.5 billion in net retail sales.

Fixed Income funds experienced £1.3 billion of inflows.

Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) experienced £458 million of net retail sales.

Money Market funds experienced net retail inflows in April of £98 million.

Property funds however experienced £38 million in net retail outflows.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global was the best-selling equity fund region in April 2021, with net retail sales of £1.96 billion.

Asia funds were second, seeing net retail inflows of £245 million.

Japan funds came next, with net retail inflows of £161 million.

UK funds experienced £46 million of net retail inflows.

North America funds saw net retail inflows of £22 million.

Europe was the only region that saw outflows, with net retail outflows of £72 million.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £2.9 billion in April 2021. Tracker funds under management stood at £269 billion as of the end of April. Their overall share of industry funds under management was 17.8%.

RESPONSIBLE INVESTMENT FUNDS

Responsible investment funds saw a net retail inflow of £1.6 billion in April 2021. Responsible investment funds under management stood at £72 billion as of the end of April. Their overall share of industry funds under management was 4.8%.

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL

In April, gross retail sales for UK fund platforms totalled £17 billion, representing a market share of 50.5%.

Gross retail sales through Other UK Intermediaries including IFAs were £7.9 billion, representing a market share of 23.3%.

Direct gross retail sales in April were £2.2 billion, representing a market share of 6.4 %.

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