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Fund flows ‘stable’ in November ahead of Omicron news, IA reveals

Savers invested £2.4 billion in investment funds in November 2021, data published today by the Investment Association (IA) reveals, as they remained committed to funds ahead of the news of the Omicron variant towards the end of the month. Tracker funds however, experienced the lowest level of inflows since March 2021, hinting at some underlying investor uncertainty around the trajectory of markets.

Other key findings for November include:

  • Global remained the best-selling IA sector for the sixth straight month. Global was the best-selling sector every month of the last 12 months bar May 2021.
  • Responsible investment fund flows increased significantly in November with over £1.8 bn in net retail sales.

 

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

“The retail funds market was stable in November as investors remained committed to funds, however low inflows into trackers hint at investor uncertainty, with US equities trackers and fixed income trackers particularly out of favour. Active management has remained attractive to investors in November, however it remains to be seen how investor attitudes will respond to the impact of the Omicron variant in December.

“There is one area of certainty however, and that is the continued appetite for sustainable and responsible investments, as investors continue to seek to use their investing power for good.”

Funds under management and net sales

                                Funds Under Management Net Retail Sales Net Institutional Sales 
November 2021£1.6 trillion£2.4 billion-£688 million
November 2020£1.4 trillion£8.3 billion£2.2 billion

 

Best selling Investment Association sectors 

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

1. Global was first with net retail sales of £760 million.

2. Mixed Investment 40-80% was second with net retail sales of £490 million.

3. Volatility Managed followed with net retail sales of £350 million.

4. Corporate Bond was fourth with net retail sales of £194 million.

5. Global Emerging Markets was fifth with £146 million.

The worst-selling Investment Association sector in November 2021 was UK All Companies, which experienced outflows of £545 million.

Net retail sales by asset class

Equity funds was the best-selling asset class in November 2021, with £918 million in net retail sales.

Other, (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) was the second best-selling asset class, with £552 million of inflows.

Fixed Income funds was the third best-selling asset class in November, with £467 million of inflows.

Mixed Asset was the fourth most popular asset class with inflows of £402 million.

Money Market funds was the fifth best-selling asset class in November, with £102 million of inflows.

Property funds saw £8 million in outflows.

Net retail sales of equity funds by region

Global was the best-selling equity fund region in November 2021, with net retail sales of £866 million.

Japan was second with net retail sales of £82 million.

Asia, Europe, North America and UK funds all experienced outflows in November 2021. Asia saw net retail outflows of £191 million, European funds experienced outflows of £98 million, North American funds saw £377 million of outflows, and UK funds saw £755 million of outflows.

Tracker funds

Tracker funds saw a net retail inflow of £758 million in November 2021. Tracker funds under management stood at £292 billion as of the end of November. Their overall share of industry funds under management was 18.6%.

Responsible investment funds

Responsible investment funds saw a net retail inflow of £1.86 billion in November 2021. Responsible investment funds under management stood at £86.0 billion as of the end of November. Their overall share of industry funds under management was 5.5%.

Gross retail sales by distribution channel

In November, gross retail sales for UK fund platforms totalled £14.5 billion, representing a market share of 49.2%.

Gross retail sales through Other UK Intermediaries including IFAs were £8.2 billion, representing a market share of 27.9%.

Direct gross retail sales in October were £1.5 billion, representing a market share of 5%.

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