Outflows rise ahead of challenging autumn forecast – Investment Association

by | Oct 6, 2022

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UK savers took £2.6 billion out of funds in August 2022, in the seventh month of net retail outflows this year, according to data published today by the Investment Association (IA). This takes outflows for 2022 to £14.6 billion.

Other key findings for August 2022 include:

  • Equity funds experienced almost £3 billion of outflows, the highest monthly outflow on record, driven by outflows from UK equities of £1 billion and from Global equities of £828 million.
  • Bond funds experienced inflows of just over £1 billion. The £ Strategic Bond was the best-selling sector with inflows of £288 million.
  • Responsible investment funds saw modest inflows of £109 million.
  • Tracker fund inflows experienced inflows of £412 million, the second weakest inflow of the year. Tracker funds have only seen one monthly outflow in 2022.

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

“While August is traditionally a quieter month for fund sales, political and economic uncertainty continued to leave savers navigating challenging market dynamics. Bond funds saw inflows, but in most IA sectors, sales have weakened or turned to outflow. Outflows from equity funds rose as the outlook for economic growth globally continued to slow, taking total outflows from funds to £2.6 billion compared with the modest -£129 million in July.

“UK households are heading into a challenging autumn and winter and grappling with a cost-of-living crisis, which may have an impact on their ability to put money aside. With market dynamics in a state of flux, we could see investors react to the surging yield on gilts and UK corporate bonds, or bide their time until we see a period of relative calm.”

FUNDS UNDER MANAGEMENT AND NET SALES

                                 Funds Under Management  Net Retail Sales  Net Institutional Sales 
August 2022 £1.4 trillion -£2.6 billion -£39 million
August 2021 £1.6 trillion £5.3 billion £249 million

BEST SELLING INVESTMENT ASSOCIATION SECTORS 

The five best-selling Investment Association sectors for August 2022 were:

  1. £ Strategic Bond with net retail sales of £288 million.
  2. Infrastructure was second with net retail sales of £205 million.
  3. Mixed Bond followed with net retail sales of £205 million.
  4. Volatility Managed was fourth this month with net retail sales of £194 million.
  5. Corporate Bond was fifth with net retail sales of £172 million. 

The worst-selling Investment Association sector in August 2022 was UK All Companies, which experienced outflows of £772 million.

NET RETAIL SALES BY ASSET CLASS

Fixed Income funds saw inflows of £1.0 billion.

Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £449 million of inflows.

Mixed Asset funds saw inflows of £102 million.

Property funds experienced £199 million of outflows.

Money Market turned to outflows, at £990 million.

Equity funds saw outflows of £2.9 billion.

NET RETAIL SALES OF EQUITY FUNDS BY REGION

All equity regions experienced outflows this month.

Japan saw outflows of £46 million.

Asia funds saw outflows of £154 million.

Europe funds saw outflows of £564 million.

North America funds saw net retail outflows of £505 million.

Global funds saw outflows of £828 million.

UK funds saw outflows of £1 billion.

TRACKER FUNDS

Tracker funds saw net retail inflows of £412 million in August 2022. Tracker funds under management stood at £288 billion at the end of August. Their overall share of industry funds under management was 20%.

RESPONSIBLE INVESTMENT FUNDS

Responsible investment funds saw a net retail inflow of £109 million in August 2022. Responsible investment funds under management stood at £90 billion at the end of August. Their overall share of industry funds under management was 6.4%.

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL

Gross retail sales for UK fund platforms totalled £12.8 billion, representing a market share of 54.1%.

Gross retail sales through other UK Intermediaries including IFAs totalled £5.9 billion, representing a market share of 25.2%.

Direct gross retail sales totalled £994 million, representing a market share of 4.2%.

In August, Execution only intermediaries totalled £102 million in gross retail sales and accounted for 0.4% of the market.

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