IMA: Retail fund sales halve between July and August

Net retail fund sales more than halved between July and August 2014 according to the latest IMA figures.

IMA data for August shows that inflows reached £695m last month compared to approximately £1.9bn for July 2014, marking the lowest inflows seen since the start of 2013.

August proved a turbulent month for investors as the build up to the Scottish referendum in mid-September caused the pound to slide and saw shares in some of Scotland’s largest companies take a hit after a poll showed the pro-independence Yes campaign in the lead for the first time.

Notably institutional funds also reported net outflows of £449m over August, according to the IMA figures, compared to net inflows of £697m in July.

Net retail sales of UK equity funds fell to £36m in August which the IMA describes as “well below” the 12 month average of £518m.

However IMA chief executive Daniel Godfrey does not draw any parallel between investors move away from UK domiciled funds during August and the Scottish independence debate.

He says: “It’s too early to judge whether the lower retail sales in August represent a change in the trend of strong sales this year. Net retail sales have totalled £15bn until the end of August in 2014, against £12bn for the first eight months in 2013.”

UK equity funds was not the only region to see inflows take a hit in August with Japan equity funds posting outflows totalling £65m over the month while European equities also experienced negative sales of £136m.

Asia equity funds replaced the UK as the best-selling region with net retail sales of £180m in August. Asia equities have seen average outflows of £18m over the past 12 months.

Despite signs of caution toward some UK assets, UK Equity Income proved the most popular IMA sector with investors for the third month running with inflows totalling £376m, although this also marked a significant fall from the £1bn inflows recorded for the previous month.

The UK All Companies sector was the worst-selling sector for the third consecutive months with outflows hitting £258m in August.