Investors back UK in March as £10bn exits funds

UK funds bucked a £10bn flight from retail investment funds in March as the Coronavirus hit markets around the world.

The UK was the best-selling equity fund region in March, with net retail sales of £747m but all other equity regions invested in by UK investors experienced outflows in March.

Latest figures from the fund managers’ trade body the Investment Association (IA) show that investors pulled out billions from funds overall in March.

The IA reported that:

• Fixed Income funds was the worst-selling asset class in March, with £7.4bn in net retail outflows.
• UK equity funds returned to inflows with net retail sales of £747m in March – all other equity regions experienced outflows.
• Short Term Money Market was the best-selling IA sector in March, with net retail sales of £1.7bn

Chris Cummings, chief executive of the Investment Association, said: “With the fastest switch to a bear market in history, the introduction of global lockdown measures designed to fight coronavirus held significant sway over the fund market in March, with a record £10 billion of retail savings flowing out of funds.

“Investors generally avoided taking money out of equity funds at low valuations. Instead, the focus was on bond funds as portfolios were re-balanced and some sought safety in cash.

“The extraordinary scale of central bank interventions in the second half of March saw market sentiment rebound, and is likely to help investors’ confidence in April.”

FUNDS UNDER MANAGEMENT AND NET SALES

Source: Investment Association

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

1. Short Term Money Market was first with net retail sales of £1.7 billion.
2. UK All Companies was second with net retail sales of £965 million.
3. Volatility Managed followed with net retail sales of £257 million.
4. Standard Money Market was fourth with net retail sales of £164 million.
5. Property Other was fifth with net retail sales of £94 million.

The worst-selling Investment Association sector in March was £ Strategic Bond with an outflow of £1.9 billion.

Money Market was the best-selling asset class in with £1.3 billion in net retail sales. Property was the second best-selling asset class, with £3 million of inflows. All other asset classes experienced outflows in March.

UK was the best-selling equity fund region in March, with net retail sales of £747 million. All other equity regions experienced outflows in March.

Gross retail sales for UK fund platforms were £15.8 billion, representing a market share of 50%.

Gross retail sales through ‘Other UK Intermediaries’ including IFAs were £8.7 billion, representing a market share of 28%. Direct gross retail sales in March were £2.3bn,  a market share of 7%.