Interactive Investor

Fund sales ‘stable’, but just two equity regions prove popular

7th January 2022 10:21

Kyle Caldwell from interactive investor

For the sixth month on the spin global equity funds attracted the most money from investors.

Fund sales were back on the rise again in November, having slipped to a 13-month low in October.

A total of £2.4 billion was invested versus £1.7 billion in the month prior, according to figures from the Investment Association (IA).

Investor sentiment towards Omicron, which was first identified as a variant of concern in late November, was not fully reflected in the data.

Chris Cummings, chief executive of the IA, noted that December’s fund sale figures will give a better reflection of how investor sentiment has been impacted by Omicron. Cummings described fund sales as being “stable” in November.

Both equity and bond funds attracted money from investors, £918 million and £467 million respectively. Another positive is that responsible investment funds continued to be in high demand, with £1.9 billion invested.

But there are plenty of signs of caution. Passive funds pulled in £758 million, but this was the lowest monthly amount since March 2021, reflecting some underlying investor uncertainty around the trajectory of markets.

In addition, while equities were in demand, just two fund sectors posted positive sales; global funds - the best-selling sector for the sixth consecutive month – attracted £866 million, while Japan funds saw inflows of £82 million.

UK, North America, Europe and Asia funds all posted outflows, of £755 million, £377 million, £191 million and £98 million.

Cummings said: “The retail funds market was stable in November as investors remained committed to funds, but low inflows into trackers hint at investor uncertainty, with US equities trackers and fixed-income trackers particularly out of favour.

“Active management remained attractive to investors in November, however, it remains to be seen how investor attitudes will respond to the impact of the Omicron variant in December.  

“There is one area of certainty, however, and that is the continued appetite for sustainable and responsible investments, as investors continue to seek to use their investing power for good.”

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