It was a year to forget for fund firms, as 2023 marked a new record for investor withdrawals.
This is according to the latest Pridham Report, which has monitored fund sales and asset trends among UK investors for more than 20 years. It noted that the UK fund industry suffered its worst year on record for net outflows. Net sales are assets remaining after investor withdrawals, while gross sales take into account only new money invested.
The gross sales picture is rosier, with the amount invested last year higher than in 2022, but below peak levels in the two years prior.
BlackRock takes the top spot on both gross and net retail sales for its fund range, attracting £30.2 billion and £6.4 billion.
The report notes that Legal & General Investment Management had a strong year as it reported a 26% rise in gross sales compared to 2022. It takes the third spot for net retail sales, with £3.1 billion invested.
Fidelity and HSBC Asset Management follow in third and fourth place for gross sales, amassing £15.2 billion and £13 billion.
Across the four groups, 71% of new flows went into passive funds. This is the same as what we’ve seen on the interactive investor platform, with index funds or exchange-traded funds (ETFs) proving popular. Among the top 10 most-bought funds in January, seven are passive, with the three most popular being Vanguard LifeStrategy 80% Equity, Vanguard US Equity Index and HSBC FTSE All-World Index.
Vanguard, the passive giant, does not appear in the Pridham Report due to not providing its figures.
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Royal London Asset Management was the top-ranked active fund manager for both gross and net sales. The report notes that while in previous years the fund firm has seen the highest inflows into its sustainable funds, in 2023 its bestsellers were short-dated fixed income and money market funds.
M&G and BNY Mellon were new entrants in the top 10 for gross new business. The report points out that M&G's Japan fund ranked among the bestselling retail funds of 2023, and the M&G Emerging Markets Bond fund was another top seller. Elsewhere, the BNY Mellon Multi-Asset Balanced fund garnered attention as a top choice among retail investors.
According to Anna Pridham, editor of the Pridham Report, this distinction between gross and net flows is important. Pridham says: “Gross sales show that established groups such as Schroders, Jupiter, BNY Mellon and JPM are attracting significant new flows. However, as mature businesses, they also contend with high levels of natural outflows and switches.”
Top 10 managers by gross retail sales in 2023 (£m)
|Legal & General Investment Management
|HSBC Asset Management
|Royal London Asset Management
|JP Morgan Asset Management
Source: The Pridham Report.
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