UK fund market sees highest level of half-year sales since 2017, says IA

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The UK fund market has had a strong first half of 2021, according to the latest set of Investment Association (IA) data.

Total net retail sales for the first half of 2021 were GBP24 billion, the highest since 2017.

Tracker funds accounted for just over half of June’s total net retail sales, which came in at GBP4.2 billion.

The Global sector was the most popular with net retail sales of GBP1.1 billion.

UK funds in total saw net retail sales of -GBP77 million but this reflected ongoing outflows from UK Equity Income, while UK All Companies funds experienced net retail sales of GBP159 million.

Tom Mills, Senior Investment Analyst at Hargreaves Lansdown, says: “The Global sector was the best-selling IA sector in June, and Equities as a whole were the best-selling asset class, indicating that UK investors continue to have a positive outlook for global share markets, which have benefitted from the ongoing economic recovery. Despite the strong performance of UK shares so far in 2021, the UK was the only equity fund region to see net outflows in June. But this mostly came from persistent outflows in UK equity income funds, which have been reducing in popularity, while UK All Companies funds attracted net inflows in June.

The latest figures also show that responsible investment continues to grow in popularity with UK investors. Responsible investment funds accounted for almost a quarter of total retail net flows in June. They currently represent 5.1 per cent of industry funds under management and have the potential to grow this share, with investors able to access to an increasing number of options in this area. Rising inflation is also an important consideration for investors and the new Global Inflation Linked Bonds Sector was the fourth best-selling IA sector during June, and the best-selling of the fixed income sectors. Inflation linked bonds are designed to provide a shelter against inflation.”

Best-selling Investment Association sectors for June 2021 were:

• Global was first with net retail sales of GBP1.1 billion
• Mixed Investment 40-85 per cent Shares was second with net retail sales of GBP910 million
• Volatility Managed followed with net retail sales of GBP363 million.
• Global Inflation Linked Bond was fourth with net retail sales of GBP214 million
• Europe Excluding UK was fifth with net retail sales of GBP212 million

The worst-selling Investment Association sector in June 2021 was Short Term Money Market with an outflow of GBP389 million.

UK funds was the only equity fund region that experienced outflows, with net retail sales of -GBP77 million.