Hannah Smith examines the fund sectors proving the most popular.
Retail fund sales hit a new record high in November, according to figures from the Investment Association (IA), with £8.3 billion flooding into funds as vaccine optimism boosted investor confidence.
The figure dwarfs the previous record of £5.7 billion achieved in September 2017, and takes total funds under management across the industry to £1.4 trillion.
Of the £8.3 billion November inflow, around half went into equity funds, while Mixed Asset funds also did well, taking in £2.3 billion. However, property funds, many of which recently lifted dealing suspensions, saw investor withdrawals of £147 million.
Responsible investment funds also continued to see strong investor interest in November, attracting a new monthly high of £1.1 billion in net retail sales. But, with £43 billion under management, these funds still account for only a small slice of the industry’s total funds under management, at just 3%.
Both active and passive tracker funds enjoyed record monthly inflows of £5.3 billion and £3 billion, respectively. Tracker funds now make up nearly 18% of total funds under management across the funds world, with £251 billion in total assets.
The most popular sector was the IA Global sector, which took in a record £1.7 billion during November, followed by Mixed Investment 40-85% Shares, taking £993 million. Global Bonds, Mixed Investment 20-60% Shares, and North America completed the top five best-selling sectors for the month.
In contrast, the worst-selling IA sector was UK All Companies, posting an outflow of £425 million, as investors continued to shun UK equities. UK funds as a whole saw net retail outflows of £461 million.
At the regional level, second only to Global funds were Asia funds, taking in a net £688 million inflow, while North America, Europe and Japan also proved popular.
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A boost to confidence
Investment Association chief executive Chris Cummings says vaccine news and the US election helped propel inflows into funds during the month.
“Savers’ confidence was boosted by news of the coronavirus vaccine breakthrough and a clear outcome in the US election, with a record £8.3 billion placed into funds in November 2020,” he says.
“Equity funds benefited most with £4.1 billion invested, while strong inflows into global equity and responsible investment funds continued as both broke new record monthly highs. Given the rocky start to 2021 with surging coronavirus cases, it remains to be seen whether investor confidence will continue into the new year.”
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