Funds bounce back in March with £2 billion inflows

by | May 4, 2023

UK investors put £2 billion into funds in March, the highest inflow since December 2021, according to data published today by the Investment Association (IA).

Key findings for March 2023:

  • All asset classes, apart from Money Market funds, experienced inflows with Equity funds and Mixed Asset funds seeing inflows of £643 million and £745 million, respectively.
  • Tracker fund flows rebounded with strong inflows of £1.6 billion in March.
  • Outflows from UK equity funds slowed to £835 million in March compared with the previous four months, which had seen monthly outflows of over £1 billion. North American equity funds saw a modest outflow of £41 million – the first outflow since October 2022.

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

“In a sign of the continuing popularity of ISAs, savers stepped-up their investments by putting £2 billion into funds in March, adding up to a £4.1 billion investment into funds in the first quarter of the year.

“In March, with the approaching end of the tax year coinciding with a better-than-expected forecast from the Office for Budget Responsibility, investors took the opportunity to invest across all major asset classes and maximise on their tax-free ISA allowance. Our research shows that the majority of investors see investing as delivering better long-term returns, with forty one percent of investors intending to put more money into their ISAs this year, than in the previous tax year.”

FUNDS UNDER MANAGEMENT AND NET SALES

                                 Funds Under Management  Net Retail Sales  Net Institutional Sales 
March 2023 £1.4 trillion £2.0 billion -£11.2 billion
March 2022 £1.5 trillion -£3.5 billion £2.5 billion

BEST SELLING INVESTMENT ASSOCIATION SECTORS 

The five best-selling Investment Association sectors for March 2023 were:

  • Short Term Money Market with net retail sales of £667 million.
  • £ Corporate Bond with net retail sales of £529 million.
  • Global with net retail sales of £365 million.
  • Volatility Managed with net retail sales of £361 million.
  • Mixed Investment 40-85% Shares with net retail sales of £267 million.

The worst-selling Investment Association sector in March 2023 was UK All Companies, which experienced outflows of £735 million.

NET RETAIL SALES BY ASSET CLASS

Mixed Asset funds saw inflows of £745 million.

Equity funds saw inflows of £643 million.

Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £461 million in inflows.

Fixed Income funds saw inflows of £363 million.

Property funds experienced a £80 million inflow.

Money Market saw outflows of £323 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION*

Global funds saw inflows of £653 million.

North America funds saw net retail outflows of £41 million.

Asia funds saw outflows at £99 million.

Japan saw outflows of £153 million.

Europe funds saw outflows of £223 million.

UK funds saw outflows of £835 million.

TRACKER FUNDS

Tracker funds saw net retail inflows of £1.6 billion in March 2023. Tracker funds under management stood at £284 billion at the end of March. Their overall share of industry funds under management was 20.6%.

RESPONSIBLE INVESTMENT FUNDS

Responsible investment funds saw a net retail inflow of £298 million in March 2023. Responsible investment funds under management stood at £94.5 billion at the end of March. Their overall share of industry funds under management was 6.8%.

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL 

Gross retail sales for UK fund platforms totalled £14.2 billion, representing a market share of 46.4%.

Gross retail sales through other UK Intermediaries including IFAs totalled £10.1 billion, representing a market share of 33.1%.

Gross retail sales for Discretionary Manager totalled £2.1 billion, representing a market share of 7.0%.

Direct gross retail sales totalled £1.1 billion, representing a market share of 3.7%.

In March, Execution only intermediaries totalled £105 million in gross retail sales and accounted for 0.3% of the market.

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