Demand for investment companies jumped in the second quarter, despite market turbulence, the latest data from the Association of Investment Companies has shown, with H1 2022 witnessing the highest level of purchases ever in a six-month period.
According to the AIC, purchases of investment companies on adviser platforms totalled £361 million in the second quarter of 2022, up 20% on the first quarter and the second-highest quarterly figure on record.
This was matched by strong net demand of £151 million, which also marked the second-highest figure recorded.
The AIC said that despite market falls in the first half of the year, there were purchases of £700 million between January and June, the highest level of purchases ever in a six-month period.
The Flexible Investment sector proved particularly popular, accounting for 17% of purchases, while the global sector, which had occupied the top spot for purchases over the previous five years, fell to second place with 13% of purchases. Meanwhile, UK smaller companies accounted for 7% of purchases, while property-UK Commercial accounted for 6%.
UK Equity Income and Infrastructure accounted for 5% of purchases respectively.
Nick Britton, head of intermediary communications at the Association of Investment Companies, said: “The healthy level of demand for investment companies during some difficult months in the market shows that advisers and wealth managers are taking a long-term perspective.
“Historically, market downturns have been great times to buy investment companies, though that’s not to say things won’t get worse before they get better.
“It’s noteworthy that the Flexible Investment sector proved so popular last quarter. This sector contains investment companies that can invest in a range of assets, including a few well known ‘capital preservation’ mandates. It doesn’t take too much imagination to guess why these might have been popular this year.
“On the other hand, a strong showing for sectors trading on wider-than-usual discounts, such as UK Smaller Companies, suggests that some buyers may have been shopping for bargains.”
