UK equity fund sales fall to year low

Portfolio-Bonds-Fixed-Income-Performance-UK-700x450.jpgMarch has been another turbulent month for equity funds as investors pulled a staggering £459m out of the sector, latest figures from the Investment Association show.

Regionally, the UK saw the largest outflows in the asset class at £430m, compared to £3m outflows in February.

Fixed income funds were the best-selling asset class for the month with net sales of £235m.

This also marked the largest outflows in a year when the UK saw more than £1bn outflows in March 2015.

Targeted absolute return was the best-selling sector for the second consecutive month with net retail sales of £485m.

IA interim chief executive Guy Sears says: “Retail investors remained cautious and reduced their holdings in equity funds, looking instead to multi-asset, absolute return and fixed income products. It is a sign of the times, with changing pension regulation and uncertainty in the global economic outlook, that multi-asset and absolute return products have been popular with retail investors.

“These sectors have grown in recent years as our members have reviewed existing products and introduced new funds to meet investors’ changing needs.”

Overall, net retail sales were at £379m in March, increasing from the deep loss of £399m a month ago.

Tracker funds also saw a significant increase to £393m form £91m a month ago.

Sears says: “Tracker funds also remained popular with retail investors, and now make up nearly 13 per cent of industry funds under management. Active and passive investment strategies can both play a part in helping people meet their investment goals.”