Fund sales up in 2011 despite ‘risk-off’ drop in Q4

Gross fund sales were able to grow in 2011 despite the ’risk-off’ attitude that persisted in the final months of the year, the Fundscape Distribution Report reveals.

The quarterly research, which is published by Fundscape and Matrix Solutions, shows that gross sales across the fund distribution universe amounted to £18.7 billion in the fourth quarter of 2011.

This represents a 16% fall from the third quarter of the year and is 20% lower than the levels recorded in the last three months of 2010.

Bella Caridade-Ferreira, director of Fundscape, says: “Third quarter sales were characterised by switching as investors responded to the worsening economic environment. (article continues below)

“But by the fourth quarter, sentiment had deteriorated, risk was off the table and gross sales plummeted.”

However, gross sales for the whole of 2011 were bolstered by “buoyant” numbers at the start of the year – amounting to £88.8 billion over the £87.8 billon seen in 2010.

The Distribution Report also shows independent financial advisers contributed 36% of fourth quarter sales and 34% of annual sales at the primary channel level, demonstrating their position as the “main generators of fund business in the UK”.