Pridham Report: Small fund managers top net retail sales

market investment chartSmall fund manager firms and new entrants dominated net retail sales in the first quarter of this year, despite big groups remaining popular.

The latest Pridham Report, published today, shows new entrants such as Fundsmith and Woodford topped the net retail sales table in the first quarter with £604m and £550m respectively.

Miton was also a strong player with net retail sales of £231m, although it is expecting increased withdrawals next quarter after the departure of its high profile managers George Godber and Georgina Hamilton.

However, the report warns larger managers continue to be most popular, attracting the highest gross sales, but the maturity of their business makes them more susceptible to outflows and switching activity.

BlackRock topped the gross retail sales chart with £2.36bn, closely followed by Standard Life Investment with £2.33bn and Fidelity with £1.9bn.

Fidelity reached its highest place in the net retail sales table in Q1 for over a decade, helped by the Moneybuilder Income and Global Dividend funds, collecting £278m in sales.

According to the report the first quarter of the year was the worst ever for the fund management industry in terms of inflows for over 20 years.

Pridham Report editor Helen Pridham says: “Groups such as Invesco Perpetual and Schroders still have plenty to offer investors which accounts for their high gross sales.

“But newer and smaller groups have less mature business on their books so their net positions look better even though their current sales are not as high as some of the more established groups.”

However, Pridham warns the future doesn’t look promising for investment appetite especially on uncertainties around the EU referendum on 23 June.

Pridham says: “The first half of this year is going to be tough for many fund managers. Until the European referendum has taken place, many investors will continue to be hesitant to commit.”