UK savers took £3.7 billion out of funds in October 2022, in the ninth month of net retail outflows this year, according to data published today by the Investment Association (IA). While outflows continued for all main asset classes in October, outflows were lower than in September, except for Mixed Asset funds.
Other key findings for October 2022 include:
- Tracker funds rebounded in October, returning to inflows at £1.4 billion, following outflows of £264 million the previous month. This is the second highest inflow into tracker funds this year.
- Responsible investment funds were back in inflows, reaching £131 million in October.
- £ Corporate Bond was the bestselling IA sector this month, with inflows of £879 million.
- Targeted Absolute Return saw the highest outflow by sector at £914 million. UK All Companies followed with £502 million in outflows.
- Mixed Asset funds saw outflows of £808 million, the highest outflow of the year. Equity funds andFixed income funds both saw outflows, at £2.3 billion and £335 million respectively.
Chris Cummings, Chief Executive of the Investment Association, said:
“Outflows slowed in October as markets settled following the gilt crisis in September, and investors took a wait-and-see approach ahead of the Autumn Statement, which saw an overwhelmingly calm reaction from markets. There are pockets of promising news, with investors once again favouring tracker funds, with inflows the second highest so far this year. Responsible investment funds, which have seen consistent inflows throughout the year, also moved back to inflows following last month’s outflow.”
“Looking ahead to next year, we will hopefully see more stability in markets and inflation come under control following the interventions from central banks. However, with an anticipated economic recession in the UK that could last until 2024, the outlook remains challenging for investors. As conditions shift, a higher interest rate environment means investing in bonds will become more attractive than it has been over the last decade. Investors will need to navigate the changing investment landscape, and we may see further shifts in the pattern of fund flows.”
FUNDS UNDER MANAGEMENT AND NET SALES
| ||Funds Under Management ||Net Retail Sales ||Net Institutional Sales |
|October 2022||£1.3 trillion||-£3.7 billion||£9.7 billion|
|October 2021||£1.6 trillion||£1.9 billion||-£217 million|
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for October 2022 were:
- £ Corporate Bond with net retail sales of £879 million.
- Short Term Money Market was second with net retail sales of £875 million.
- Government Bond followed with net retail sales of £222 million.
- Property Other was fourth this month with net retail sales of £115 million.
- Volatility Managed was fifth with net retail sales of £97 million.
The worst-selling Investment Association sector in October 2022 was Targeted Absolute Return, which experienced outflows of £914 million.
NET RETAIL SALES BY ASSET CLASS
Money Market was saw inflows of £595 million.
Property funds experienced £32 million in inflows.
All other asset classes experienced outflows this month.
Mixed Asset funds saw outflows of £808 million.
Fixed Income funds saw outflows of £335 million.
Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £833 million in outflows.
Equity funds saw outflows of £2.3 billion.
NET RETAIL SALES OF EQUITY FUNDS BY REGION*
Japan saw inflows of £43 million.
All other equity regions experienced outflows this month.
Asia funds saw outflows of £35 million.
North America funds saw net retail outflows of £67 million.
Europe funds saw outflows of £537 million.
UK funds saw outflows of £792 billion.
Global funds saw outflows of £737 billion.
Tracker funds saw net retail inflows of £1.4 billion in October 2022. Tracker funds under management stood at £278 billion at the end of October. Their overall share of industry funds under management was 20.5%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail inflow of £131 million in October 2022. Responsible investment funds under management stood at £89 billion at the end of October. Their overall share of industry funds under management was 6.6%.
GROSS RETAIL SALES BY DISTRIBUTION CHANNEL
Gross retail sales for UK fund platforms totalled £12.3 billion, representing a market share of 47.5%.
Gross retail sales through other UK Intermediaries including IFAs totalled £7.8 billion, representing a market share of 30.1%.
Direct gross retail sales totalled £902 million, representing a market share of 3.5%.
In October, Execution only intermediaries totalled £231 million in gross retail sales and accounted for 0.9% of the market.
Gross retail sales for Discretionary Manager totalled £1.9 billion, representing a market share of 7.4%.