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£10bn in outflows from IA sectors

10 May 2020

March saw a total of £10bn withdrawn from funds, latest data from the Investment Association shows, as 96% of funds experienced loses.

Fixed income funds suffered most in the month, with £7.4bn in net retail outflows, while equity funds saw outflows of £1.1bn.

The five best-selling Investment Association sectors for March 2020 were:

1. Short Term Money Market – net retail sales of £1.7 billion.

2.UK All Companies – net retail sales of £965 million.

3. Volatility Managed – net retail sales of £257 million.

4. Standard Money Market – net retail sales of £164 million.

5. Property Other – net retail sales of £94 million.

The UK was the best-selling equity fund region in March 2020, with net retail sales of £747 million.

Tracker funds saw a net retail inflow of £467 million in March 2020. Tracker funds under management stood at £199 billion as of the end of March, an overall share of industry funds under management of 17.8%.

Responsible investment funds also saw net retail inflows in March, of £113 million. These funds currently stand at £25 billion with an overall share of 2.3%.

Commenting on the inflows into tracker funds, Laura Suter, personal finance analyst at investment platform AJ Bell said the move felt “slightly counterintuitive as just after market falls is when active managers should shine, with the ability to weed out those companies that will never recover from those that have been unfairly dragged down with the market or are primed for a rebound post-crisis.

“Fund managers will be hoping that at least some of this move to passives might signal a holding space to stay in markets while investors select which funds to move their money into.”

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