June data published by the Investment Association (IA) has revealed that the first half of 2021 saw UK fund market net retail sales of £24 billion, the highest level of half-year sales since 2017 — which itself saw record levels of investment.
Investment Association CEO Chris Cummings said if the pace of net sales continues at the same rate, the industry could be on track to match the record-breaking inflows of 2017.
The IA represents the UK investment management industry and its 250 member firms manage £8.5 trillion of assets and support 113,000 jobs.
The other key findings for June included:
- Tracker funds enjoyed continued strong inflows in June, with net retail sales of £2.2 billion.
- Responsible investment funds saw over £1 billion of inflows in June, and a total of £4 billion for Q2 – the highest quarterly inflows since IA data was first collected.
- As inflation rises, the newly launched Global Inflation Linked Bonds sector was the highest selling fixed income sector at £214 million. This inflow is 4% of the sector’s funds under management of £5.6 billion.
- Total net retail sales for June were £4.2 billion.
Cummings said: “The positive inflows for the first half of the year are a clear sign of the strong economic recovery and growing investor confidence as we emerge from the pandemic.
“If the pace of net sales continues at the same rate, we could be on track to match the record-breaking inflows of 2017.
“However, investors also have one eye on inflation, which may have a greater impact in the second half of the year.
“Investors looking for lower cost ways to save have continued to put their money into tracker funds.
“The difference in the data has been steady sales to active funds following March 2020’s outflow, helping flows to reach a record H1 total.
“Elsewhere, the strong quarterly inflows into responsible investment funds are the highest since the data was first collected.”
Equity was the best-selling asset class in June 2021 with £2.2 billion in net retail sales. Fixed income was the second best-selling asset class, with £986 million of inflows.
Mixed asset funds experienced £935 million of inflows. Other funds — which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors — experienced £469 million of net retail sales.
Money Market funds however experienced net retail outflows in June of £369 million.
Property funds experienced £18 million in net retail outflows.
Global was the best-selling equity fund region in June 2021, with net retail sales of £1.1 billion. Europe funds were second, seeing net retail inflows of £247 million.
North America funds saw net retail inflows of £184 million. Japan funds experienced net retail inflows of £107 million. Asia funds experienced net retail inflows of £72 million.
UK funds was the only equity fund region that experienced outflows, with net retail sales of £77 million.
Tracker funds under management stood at £278 billion as of the end of June. Their overall share of industry funds under management was 18.2%.
Responsible investment funds under management stood at £78 billion as of the end of June. Their overall share of industry funds under management was 5.1%.
In June, gross retail sales for UK fund platforms totalled £14 billion, representing a market share of 51.3%.
Gross retail sales through other UK intermediaries including IFAs were £7 billion, representing a market share of 25.8%.
Direct gross retail sales in June were £1 billion, representing a market share of 4%.