UK investors moved £409m into funds in February as ISA savers continued to commit to long-term investing, according to the fund sector’s trade body.
The Investment Association said equity funds saw outflows ‘soften’ during the month.
Outflows fell to £696m in February, down from January’s £916m and a more positive figure after 2022’s record £25.7bn in outflows.
Outflows from UK equities increased slightly to £1.6bn, the worst outflow since January 2022.
Meanwhile North American equities saw slightly stronger inflows at £557m, up from £361m in January.
Bond funds saw strong inflows in February at £1.1bn, although that was a slight decrease from January’s £1.6bn inflow.
Chris Cummings, chief executive of the Investment Association, said: “February’s steady inflows were largely driven by bond funds. Other funds followed the trajectory we saw in January, with North American equities and mixed asset funds continuing to see modest inflows in February.
“Meanwhile, UK equities faced another difficult month as investors failed to respond to the slightly improved outlook for the UK.”
FUNDS UNDER MANAGEMENT AND NET SALES
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Funds Under Management
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Net Retail Sales
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Net Institutional Sales
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February 2023
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£1.4trn
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£409m
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-£1.5bn
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February 2022
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£1.5trn
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-£2.5bn
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-£846m
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BEST SELLING FUND SECTORS
The five best-selling Investment Association sectors for February 2023 were:
- North America with net retail sales of £454m.
- Corporate Bond was second with net retail sales of £279m.
- Mixed Bond followed with net retail sales of £232m.
- Global Inflation Linked Bond was fourth this month with net retail sales of £170m.
- Global Equity Income was fifth with net retail sales of £168m.
The worst-selling Investment Association sector in February 2023 was UK All Companies, which experienced outflows of £1.3bn.
NET RETAIL SALES BY ASSET CLASS
Fixed Income funds saw inflows of £1.1bn.
Mixed Asset funds saw inflows of £652m.
Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £253m in inflows.
Property funds experienced £69m in outflows.
Equity funds saw outflows of £696m.
Money Market saw outflows of £882m.
NET RETAIL SALES OF EQUITY FUNDS BY REGION
North America funds saw net retail inflows of £557bn.
Japan saw inflows of £98m.
Asia funds turned to outflows at £78m.
Global funds saw outflows of £279m.
Europe funds saw outflows of £245m.
UK funds saw outflows of £1.6bn.
TRACKER FUNDS
Tracker funds saw net retail inflows of £264m in February 2023. Tracker funds under management stood at £297bn at the end of February. Their overall share of industry funds under management was 21.1%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail outflow of £16m in February 2023. Responsible investment funds under management stood at £94bn at the end of February. Their overall share of industry funds under management was 6.6%.
GROSS RETAIL SALES BY DISTRIBUTION CHANNEL
Gross retail sales for UK fund platforms totalled £12.5bn, representing a market share of 50.2%.
Gross retail sales through other UK Intermediaries, including IFAs, totalled £6.7bn, representing a market share of 26.8%.
Gross retail sales for Discretionary Managers totalled £2.0bn, representing a market share of 8.2%.
Direct gross retail sales totalled £1.2bn, representing a market share of 4.6%.
In February, execution-only intermediaries totalled £141m in gross retail sales and accounted for 0.6% of the market.
