Press Release
Thursday 31 January 2013
2012 ENDS WITH EQUITY AS THE LEADING ASSET CLASS
The Investment Management Association (IMA) today publishes figures for the fund management industry for 2012:
- Equity funds outsold fixed income in each of the last four months of 2012
- Fixed income was the best selling asset class overall in 2012 with net retail sales of £5.6 billion
- Funds under management at a record level of £658 billion, up over £80 billion (14%) since Dec 2011
- Net retail sales were £13.7 billion, compared with £18.1 billion for 2011
- Global equity funds dominated UK and regional equity funds in 2012 with net retail sales of £4.1 billion, compared with £3.3 billion in 2011
Daniel Godfrey, IMA Chief Executive, said:
“Net retail sales were a healthy £14 billion in 2012, which helped grow the funds managed by the industry to over £650 billion for the first time.
“Fixed income funds attracted most retail money in 2012, the fifth consecutive year in which fixed income funds outsold equity funds. However, there was a clear shift in investor behaviour towards the end of 2012 with equity funds taking more money than fixed income funds every month from September to December.”
UK DOMICILED FUNDS
| SUMMARY UK DOMICILED |
FUNDS UNDER MANAGEMENT |
RETAIL SALES (NET) |
ISA SALES (NET) |
| 2012 | £658 billion | £13.7 billion | £1.3 billion |
| 2011 | £576 billion | £18.1 billion | £3.0 billion |
SALES
Net retail sales were £13.7 billion in 2012 – less than the previous three years but higher than most of the 2000s.
ISA net sales were £1.3 billion in 2012 – less than recent years but better than any of the years between 2004 and 2008.
(See Table 3)
FUNDS UNDER MANAGEMENT
Funds under management at the end of 2012 reached a record of £658 billion, compared with £576 billion in 2011.
ISA funds under management were £113 billion at the end of 2012, compared with £102 billion in 2011.
(See Table 2)
ASSETS
Net retail sales
Fixed Income was the highest selling asset class in 2012 with net retail sales of £5.6 billion. This is the fifth consecutive year that fixed income funds have outsold equity funds.
Equity was the second best selling asset class in 2012 with net retail sales of £3.4 billion.
Mixed Asset was the third best selling asset class in 2012 with net retail sales of £2.6 billion.
| 2012 RANKING | ASSET CLASS | 2012 NET RETAIL SALES | 2011 RANKING | 2011 NET RETAIL SALES |
| 1 | Fixed Income | £5.6 billion | 2 | £4.5 billion |
| 2 | Equity | £3.4 billion | 4 | £3.2 billion |
| 3 | Mixed Assets | £2.6 billion | 1 | £5.6 billion |
| 4 | Other | £1.6 billion | 3 |
£4.2 billion |
| 5 | Property | £342 million | 5 |
£507 million |
| 6 | Money Market | £97 million | 6 |
£200 million |
(See Table 4)
There was a sharp change between the first eight months of the year and the last four. Between January and August 2012, fixed income funds had higher net retail sales every month than equity funds. The reverse was true between September and December when equity funds outsold fixed income every month.
Funds under management
Equity funds still hold the highest proportion of total funds under management, however their steady decline over the last 10 years continues – going from 72% in 2003 to 53% in 2012.
Funds under management for fixed income funds was 18% of total funds under management in 2012, which is a continuation of their upward trend from 15% in 2003.
(See Table 2)
EQUITY NET RETAIL SALES BY REGION*
Global equity funds were dominant in 2012 with net retail sales of £4.1 billion, compared with £3.3 billion in 2011.
Asia was the second best selling region with net retail sales of £690 million, more than reversing 2011’s net outflow of £383 million. However Japanese equity funds saw change in the opposite direction – a net inflow of £660 million in 2011 turning into a small outflow of £27 million in 2012.
UK equity funds saw outflows in net retail sales of £982 million in 2012, making it the worst selling equity funds region – more than reversing 2011 net retail sales of £714 million.
Europe was the second worst selling region in 2012 with these equity funds seeing net retail outflows of £527 million. This was the eleventh successive year of outflows. However, there were signs of change in the last part of 2012 with net inflows in each month from September to December.
| Region | Net retail sales in 2012 |
Net retail sales in 2011 |
FUM in Dec 2012 |
| Asia | £690 million | -£383 million | £30 billion |
| Europe | -£527 million | -£1,104 million | £36 billion |
| Global | £4,081 million | £3,286 million | £103 billion |
| Japan | -£26 million | £660 million | £7 billion |
| North America | £157 million | £1 million | £23 billion |
| UK | -£982 million | £714 million | £180 billion |
IMA SECTOR RANKINGS
The five best-selling sectors for 2012, in descending order, were:
- £ Strategic Bond was the best selling sector for the first time with net retail sales of £2.2 billion, having been in second place in 2011.
- £ Corporate Bond was the second best selling sector with net retail sales of £1.9 billion. This sector was the top selling sector for six months in 2012, however significant outflows in November and December prevented it being the overall best selling sector for the year.
- Mixed Investment 20-60% Shares was the third best-selling sector with net retail sales of £1.8 billion. This sector was previously known as the Cautious Managed sector which was ranked as the top selling sector in 2011 with net retail sales of £3.4 billion.
- Global Emerging Markets was the fourth best selling sector with net retail sales of £1.6 billion, the highest ever recorded.
- Global Equity Income was the fifth best selling sector with net retail sales of £1.4 billion, having only been launched in January 2012.
| 2012 RANKING | IMA SECTOR | 2012 NET RETAIL SALES |
2011 RANKING |
2011 NET RETAIL SALES |
Asset Class |
| 1 | £ Strategic Bond | £2.2 billion | 2 | £2.8 billion | Fixed Income |
| 2 | £ Corporate Bond | £1.9 billion | 14 | £265 million | Fixed Income |
| 3 | Mixed Investment 20-60% Shares | £1.8 billion | 1 | £3.4 billion | Mixed Assets |
| 4 | Global Emerging Markets | £1.6 billion | 7 | £755 million | Equity |
| 5 | Global Equity Income | £1.4 billion | N/A | N/A | Equity |
The worst selling IMA sector in 2012 in terms of net retail outflows was UK All Companies with an outflow of £2.0 billion.
In terms of net sales, the most popular IMA Sector chosen for ISAs in 2012 was the £ Strategic Bond sector (£448 million). This was followed by:
- Mixed Investment 20-60% Shares (£351 million)
- Global Emerging Markets (£219 million)
- £ Corporate Bond (£205 million)
- Global Equity Income (£205 million)
The least popular sector in terms of net ISA sales was UK All Companies with a net outflow of £1.0 billion in 2012.
RETAIL DISTRIBUTION
Gross retail sales through ‘Other Intermediaries’ (includes Wealth Managers, Stockbrokers and IFAs) totalled £48.2 billion in 2012, a market share of 45% - the same as 2011.
Gross retail sales through UK fund platforms** totalled £47.7 billion in 2012, a market share of 45%, up from 41% in 2011.
Direct channels’ gross retail sales totalled £10.6 billion in 2012, which is a market share of 10%, down from 14% in 2011.
Funds under administration for the five Fund Platforms reporting directly to IMA*** totalled £132 billion at the end of 2012, up from £109 billion in 2011.
Total gross sales for the five fund platforms totalled £35.3 billion in 2012. Of these, over a quarter (26%) were through ISAs and over a quarter (28%) through Personal Pensions, while over a third (39%) was via Unwrapped products (funds without a tax wrapper). These shares are very similar to 2011.
INSTITUTIONAL FUNDS
2012 saw institutional sales of £8.3 billion. This would have been a small outflow without insurance fund assets being transferred into unit trust / OEIC structures in November 2012.
(See Table 4)
OVERSEAS DOMICILED FUNDS
Net retail sales of overseas domiciled funds sold to UK investors totalled £3.3 billion in 2012, the highest since records began in 2006. This compares with £3.1 billion in 2011.
Funds under management for overseas funds totalled £50.5 billion at the end of 2012.
(See Table 10)
-ENDS-
For further information, please contact:
Navdeep Sidhu, Press Officer, IMA - 020 7831 0898 or 07843 517618 – press@investmentuk.org
Christina Bridge, Press Assistant, IMA – 020 7831 0898 – press@investmentuk.org
The IMA's press releases and statistical information can all be found at www.investmentuk.org
Notes for Editors
For more details on the figures given in the press release, please see tables below.
1 Summary table
2 Funds under management - by asset class
3 Sales - gross, net and ISAs
4 Sales - net sales by asset class
5 Sales - by distribution channel
6 Sales - by Platforms
7 Sectors - funds under management and sales
8 Sectors - gross and net sales
9 Sectors - best and worst selling
10 Offshore funds - funds under management and sales
11 Sectors - investment performance
Graphs
1 Funds under management - by month
2 Sales - net retail sales past year
The IMA's figures for fund sales cover retail and institutional sales for 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 £4.2 trillion asset management industry, which also covers pension and insurance company funds, including £1.6 trillion invested on behalf of overseas clients.
The IMA published its 10th Asset Management Survey in September 2012 which is a comprehensive analysis of the industry as a whole. It covers facts and figures on funds and investor behaviour, along with findings from interviews with senior industry figures on regulation, the banking sector and the changing pensions landscape.
Net retail sales comprise total retail sales minus repurchases (transfers out or switches), thus the figures can result in a negative figure or outflow.
* Regions for equity figures
The following IMA sectors have been grouped together to compile the figures for regional equity sales and funds under management:
| Asia | Europe | Global | Japan | North America | UK |
| Asia Pacific excl. Japan | Europe Excl. UK | Global | Japan | North America | UK All Companies |
| Asia Pacific incl. Japan | Europe Incl. UK | Global Emerging Markets | Japanese Small Companies | North America Smaller Companies | UK Equity Income |
| China/Greater China | Europe Smaller Companies | Global Equity Income | UK Smaller Companies | ||
| Specialist | |||||
| Technology and Telecommunications |
Fund Platforms
** The figure for Fund Platform sales covers 12 Platforms comprising Ascentric, Aviva Wrap, AXA Elevate, Cofunds, Fidelity; Hargreaves Lansdown, James Hay Wrap, Novia, Nucleus, Skandia (including Selestia, Skandia Multifunds and Skandia Life), Standard Life Savings, and Transact. Platform data includes sales made through IFAs as well as direct.
*** Five leading Fund Platforms - Cofunds, Fidelity, Hargreaves Lansdown, Skandia and Transact - provide the IMA with figures of their sales, repurchases and funds under administration, with figures going back to January 2008. The five platforms are providing sales data for ISAs, Personal Pensions, Insurance Bonds, and funds sold without a wrapper (unwrapped). Between them, these five leading platforms account for around 85% of the gross sales of the full list of Platforms included in the section on retail distribution.
Direct Channels
Direct includes sales forces and tied agents, private clients and other direct to investor sales without intermediation.
Variations in figures
Each month small revisions to the figures may have been made since previous press releases. This reflects additional information received by the IMA.
About the Investment Management Association:
- The IMA is the trade body for asset managers (retail and institutional) who manage £4.2 trillion of assets in the UK as at December 2011.
- Our role is to support and promote a commercially successful and growing UK investment management industry as we seek to improve financial outcomes for customers – savers and investors.
- The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
- The UK is the second largest investment management centre in the world, after the US.
- The IMA has recently launched a consumer website providing comprehensive information on investment funds.