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Investment Association: £5.2BN inflows to active funds in December in 2nd highest inflows on record

Net retail sales reached £6.2bn in December 2020, in the second largest monthly net retail sales figure on record after November 2020, data published today by the Investment Association (IA) reveals. The other key findings for December include:

  • Active funds saw net retail sales of £5.2bn in December, just below the record inflow of £5.4bn in November 2020, while tracker funds attracted £926m.
  • Responsible investment funds attracted a record £1.1bn in net retail sales in December 2020.
  • Equity funds were the best-selling asset class in December, attracting net retail sales of £2.5bn, buoyed by strong net retail sales to Global equity funds of £1.5bn.

The UK’s funds under management (FUM) reached a record £1.4trn at the end of 2020, after a tumultuous year where FUM reached as low as £1.1trn at the end of March. Other key findings for the year include:

  • Net retail sales for 2020 reached £31bn, with inflows in Q2 and Q4 both exceeding £10bn. Total net retail sales for 2019 only just reached £10bn.
  • Responsible investment funds saw net retail sales treble to £10bn in 2020, compared to £3.2bn in 2019.
  • Active funds attracted £12.4bn in net retail sales in 2020, compared to outflows of £8.1bn in 2019.
  • Equity funds were the best-selling asset class in 2020 attracting £10.4bn, buoyed by strong net retail sales in Q2 and Q4 and a significant reversal of 2019’s £2.9bn net retail outflows.

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

“December saw a continuation of the strong net retail sales of November, with the fund market buoyed to a positive end-of-year position. Growing positivity around coronavirus vaccines helped boost stock market performance in December which in turn fuelled investor appetite for stocks and shares funds, with investors placing £2.5bn into these funds throughout the month.

“The fund market accumulated strong sales over 2020 and ends a tumultuous year with record funds under management. Continued economic uncertainty, set against the progress made on a national vaccine roll-out, means we enter 2021 with cautious optimism.”

FUNDS UNDER MANAGEMENT AND NET SALES

Funds Under ManagementNet Retail SalesNet Institutional Sales
December 2020£1.4 trillion£6.2 billion£4.8 billion
December 2019£1.3 trillion£2.5 billion£626 million

BEST SELLING INVESTMENT ASSOCIATION SECTORS  

The five best-selling Investment Association sectors for December 2020 were:

  1. Global was first with net retail sales of £1.2 billion.
  2. Mixed Investment 40-85% Shares was second with net retail sales of £838 million.
  3. North America followed with net retail sales of £412 million.
  4. £ Corporate Bond was fourth with net retail sales of £396 million.
  5. Volatility Managed was fifth with net retail sales of £333 million.

The worst-selling Investment Association sector in December 2020 was UK Equity Income with an outflow of £501 million.

NET RETAIL SALES BY ASSET CLASS

Equity funds were the best-selling asset class in December 2020 with £2.5 billion in net retail sales.

Mixed Asset was the second best-selling asset class, with £1.8 billion of inflows.

Fixed Income experienced £1.3 billion of inflows.

Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) experienced £534 million of net retail sales.

Money Market funds however experienced £52 million in net retail inflows.

However, Property funds experienced net retail outflows in December of £73 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global was the best-selling equity fund region in December 2020, with net retail sales of £1.5 billion.

North America funds were second, seeing net retail inflows of £504 million.

Asia funds came next with net retail inflows in December of £210 million.

Europe funds experienced net retail outflows of £137 million.

Japan funds saw net retail inflows of £98 million.

UK funds saw net retail outflows of £845 million.

TRACKER FUNDS

Tracker funds saw a net retail inflow of £926 million in December 2020. Tracker funds under management stood at £256 billion as of the end of December. Their overall share of industry funds under management was 17.8%.

RESPONSIBLE INVESTMENT FUNDS

Responsible investment funds saw a net retail inflow of £1.1 billion in December 2020. Responsible investment funds under management stood at £45.7 billion as of the end of December. Their overall share of industry funds under management was 3.2%.

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL

In December, gross retail sales for UK fund platforms totalled £15 billion, representing a market share of 48.2%.

Gross retail sales through Other UK Intermediaries including IFAs were £9 billion, representing a market share of 29%.

Direct gross retail sales in December were £2 billion, representing a market share of 6.4%.

ENDS

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