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Press Release

 

SUMMARY
UK DOMICILED

FUNDS UNDER MANAGEMENT

RETAIL SALES
(NET)

ISA SALES
(NET)

February 2010

£484.7 billion

£1.9 billion

  £230 million

February 2009

£341.2 billion

£1.2 billion

-£113 million

 

 

 

UK DOMICILED FUNDS

SALES

February 2010 saw net retail sales of £1.9 billion - the highest ever achieved in any February.  This follows on from the highest ever January, making 2010 the strongest start to any year.

(See Table 3, and Chart 2)

FUNDS UNDER MANAGEMENT

Funds under management reached £484.7 billion at the end of February 2010 - an all time high -  £13.1 billion (3%) up on January and £143.6 billion (42%) up on February last year.  The increases reflect both very high levels of sales - £1.9 billion total net sales in the previous month and £30.0 billion over the previous year - and rises in the market.  (The FTSE 100 closed at 5354.5 at the end of February 2010, 40% up on the year before.)

(See Table 2)

ISAs

Stocks and shares ISAs showed a strong start to the ISA season, with net retail sales of £230 million - the highest February since 2002.  The contrast to a year ago is striking - in February 2009 net retail sale of ISAs experienced an outflow of £113 million, when investors cashed in more of their ISA savings in funds than they bought new funds.**

(See  Table 3 and Table 7)  

ASSET CLASSES

Equities were the highest selling asset class, with £703 million in net retail sales, 23% up on January and in sharp contrast to a year ago which saw net outlows of £28 million. 

Bond sales, which dominated the first half of last year, slipped to third place, behind ‘Other'.  Total net retail sales of Bonds totalled £303 million in February, less than a third of the level achieved in February 2009 (£1.0 billion). 

(See Table 4)

IMA SECTORS

The top selling IMA sector in February was £ Strategic Bond, with net retail sales of £278 million, the first time it has been the top sector since April 2008.  It has been amongst the top ten best-selling IMA sectors for 20 out of the 26 months since the sector was created. 

The IMA £ Strategic Bond sector offers the fund manager more flexibility to change the balance between different types of bonds, thus making the funds able to respond to changes in the market.** 

This can make £ Strategic Bond a good choice in times of uncertainty or change. 

The UK Bond sectors were reclassified from January 2008, when UK Corporate Bonds and UK Other Bonds were split into the three current UK bond sectors: £ Corporate Bond, £ High Yield Bond and £ Strategic Bond.

The lowest selling IMA sector in February was £ Corporate Bond, which experienced net retail outflows of £140 million. 

In February 2009, by contrast, £ Corporate Bond was the highest selling IMA sector.  In fact, £ Corporate Bond was the top selling IMA sector for ten consecutive months from November 2008 to August 2009 .

Property, which had been the highest selling sector in January 2010 and for the last quarter of 2009, slipped to 5th place, with net retail sales down by 59% to £152 million. 

In February 2009, by contrast, Property was in the bottom 5 IMA sectors for sales, with net retail outflows of £39 million. 

   

 

TOP 5 IMA SECTORS (NET RETAIL) -
FEBRUARY 2010

TOP 5 IMA SECTORS (NET RETAIL) -
FEBRUARY 2009

 1st

 £ Strategic Bond

 1st

 £ Corporate Bond

 2nd

 Absolute Return-UK

 2nd

 Specialist

 3rd

 Global Growth

 3rd

 Absolute Return-UK

 4th

 Cautious Managed

 4th

 £ Strategic Bond

 5th

 Property

 5th

 UK Gilts

BOTTOM 5  SECTORS (NET RETAIL) -
FEBRUARY 2010

BOTTOM 5  SECTORS (NET RETAIL) -
FEBRUARY 2009

 30th

 UK Gilts

 29th

 Asia Pacific excluding Japan

 31st

 UK Equity Income

 30th

 Property

 32nd

 Europe excluding UK

 31st

 UK All Companies

 33rd

 UK All Companies

 32nd

 Europe excluding UK

 34th

 £ Corporate Bond

 33rd

 Japan

(See Table 7 and Table 8

INSTITUTIONAL FUNDS

Institutional funds sales showed an outflow of just £1 million in February, in contrast to a net inflow of £1.1 billion in February 2009. 

The asset class ‘Other' did best with net sales of £283 million whilst Bonds saw an outflow of £402 million.

The top selling IMA sector was Absolute Return-UK, which comprised the vast majority (93%) of ‘Other'.  The lowest selling IMA sector was £ Corporate Bond, with outflows of £272 million. 

(See Table 4)

OVERSEAS DOMICILED FUNDS

Overseas domiciled funds, in contrast to UK domiciled funds, experienced an outflow of funds totalling £164 million in February 2010.  Funds under management rose 2% to £24.9 billion. 

 

OVERSEAS DOMICILED

FUNDS UNDER MANAGEMENT

RETAIL SALES
(NET)

ISA SALES
(NET)

February 2010

£24.9 billion

-£151.0 million

  £0.7 million

February 2009

£14.9 billion

£58.2 million

-£0.3 million


(See Table 5)

 

From April this year the IMA will be including Offshore Funds within IMA sectors.*** 

 

For more details on the figures given in the press release, please see the tables below.

All tables

1   Summary table
2   Funds under management - by asset class
3   Sales - gross, net and ISAs
4   Sales - net sales by asset class 
5   Offshore funds - funds under management and sales
6   Sectors - funds under management and sales 
7   Sectors - gross and net sales 
8   Sectors - best and worst selling
Sectors - investment performance

Graphs

Funds under management - by month
Sales - net retail sales by year

The IMA's figures for fund sales cover UK authorised unit trusts and open ended investment companies (OEICs).  The IMA publishes these figures on a monthly basis.

Funds comprise a key element of the UK's £3 trillion asset management industry, which also covers pension and insurance company funds, including £1 trillion invested on behalf of overseas clients.  Each year the IMA publishes its annual Asset Management Survey, which looks at the industry in the round.

* Net retail sales comprise total retail sales minus repurchases, thus the figures can result in a negative figure or outflow. 

** Sector definition - £ Strategic Bond

Funds which invest at least 80% of their assets in Sterling denominated (or hedged back to Sterling) fixed interest securities. This includes convertibles, preference shares and permanent interest bearing shares (PIBs).  At any point in time the asset allocation of these funds could theoretically place the fund in one of the other Fixed Interest sectors. The funds will remain in this sector on these occasions since it is the Manager's stated intention to retain the right to invest across the Sterling fixed interest credit risk spectrum.

Note:

1. Across all fixed income sectors there is no prescription within the non core parameters. Firms are reminded that, whilst the sectors provide freedom in respect of investment in the non-core element of the definitions, the investment strategy adopted must be transparent to the end customer, appropriate to deliver on the fund objective and take account of the firm's TCF (Treating Customers Fairly) obligations.

2. Convertibles, preference shares and permanent interest bearing shares (PIBs) are excluded from the investment grade and government percentage in the fixed income sector classifications. This will allow a small holding in these instruments in the higher quality funds, and not inhibit investment in them for the higher risk/higher return funds.

3. Where ratings of a bond differ between the rating agencies it is for the firm to decide which rating is relevant, taking account of their own assessment of the security of the bond. Consideration should be given to what would result from the most cautious interpretation or if an average of the ratings were adopted.

4. Derivative usage should be within the spirit of the sector restrictions and not lead to the actual exposure of the fund being outside the set limits of its sector. This will be self policed (for now). The IMA does not wish to inhibit funds from using their full UCITS III powers, whilst recognizing the limitations on monitoring at the present time.

5. In the gilt/bond sectors, a security with 0-3 months to maturity will be treated as cash. Securities maturing within 3-12 months will be treated as bonds. 

(See the IMA website for IMA sector definitions)

*** For more details about the IMA's recently announced plans to incorporate Offshore Funds into the IMA sectors see press release, ‘IMA announces admittance of Offshore Funds into IMA Sectors', dated 23 March 2010.

For further information, please contact:

Ginny Broad, Head of Communications, IMA, 020 7831 0898 or 07834 089332
Sally Biggs, Polhill Communications, 020 7655 0520 or mobile 07961 463864
Paula Nugent, Polhill Communications, 020 7655 0520

The IMA's press releases and statistical information can all be found at www.investmentuk.org

-ENDS-

Notes for Editors


 

Tuesday 30 March 2010

STRONGEST START TO THE YEAR FOR FUND SALES

Investment fund statistics - February 2010

The Investment Management Association today publishes the fund sales statistics for February 2010. 

Key findings:  

  • Net retail sales of  £1.9 billion - the highest ever February, following the highest ever January
  • Funds under management at £484.7 billion reach an all time high
  • ISA sales the highest February since 2002 - a strong start to the ISA season
  • £ Strategic Bond the best selling IMA Sector in February

Jane Lowe, Director of Markets at the IMA, comments:      

 

"The year has started very strongly, with sales figures the highest January and February on record. Funds under management are the highest on record, beating the previous peak in October 2007.  The ISA season is going well, with ISA sales the highest since February 2002. 

"The top selling IMA sector is £ Strategic Bond.  This sector accounted for the majority of net retail sales in the bond sectors, which otherwise slipped in popularity against the equity and other asset categories.  Investors may find the additional flexibility offered by these funds attractive in times of uncertainty or change.

 

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