July is record month for tracker sales as Woodford boosts UK equity income

Tracker funds recorded their high net retail sales figures on record in July with £532m according to the Investment Management Association.

In July total net retail sales were down with the industry receiving £1.9bn in net retail sales, down 21 per cent from from £2.4bn in July 2013.

Equity was the best selling asset class in July as the IMA Equity Income sector continued to be the most popular sector with £1bn in net retail sales.

This is however a decrease of 28 per cent from June when the sector received net retail sales of £1.4bn. 

The IMA Equity Income sector has seen strong inflows since the launch of Neil Woodford’s new fund at the beginning of June. As of 31 July the Woodford Equity Income fund was £2.3bn in size. 

Mixed asset was the second best-selling asset class in July with £390m in net retail sales and property was the third best-selling with net retail sales of £304m.

These sales represent a net retail sales increase of 27 per cent from June for mixed asset and a corresponding decline of 4 per cent for property. 

Due to these net retail sales of £304m, the IMA Property sector was the second most popular sector in July.

The IMA £ Strategic Bond sector was the third most popular sector in July with net retail sales of £274m – an increase of 60 per cent in net retail sales from June. 

The worst-selling IMA sector in July was the IMA UK All Companies sector with a net retail outflow of £230m. This was also the worst selling sector in June but outflows were 45 per cent worse in that month from June. 

Hargreaves Lansdown senior analyst Laith Khalaf says: ”Passive funds have seen record inflows as investors focus on costs and performance. We have noticed this too with investor interest in our new core tracker range of preferred passive funds.

”We expect the UK market to gradually polarise into low cost passive funds on one hand, and active managers with a proven track record on the other. The middle ground hitherto inhabited by the closet tracker is being eroded, as investors become more savvy and demand outperformance from their active managers.”