Investment Association (IA), a trade body representing UK investment managers, has published a report revealing that UK equity funds were the best-selling region in May with net retail sales of £532 million.
According to the data, fixed income was also the highest selling asset class for the third month in a row as net retail sales reached £771 million.
Meanwhile, tracker funds experienced their highest ever month of net retail sales with £2.3 billion inflows.
Chris Cummings, Chief Executive of the Investment Association, felt the results were a mixed bag for the industry despite the positive news for equity funds.
He said: “UK equity funds saw a reversal of fortune in May, with savers placing £532 million into these funds in the first net inflows since April 2017. However, overall equity sales remain weak, with significant outflows from European equity funds and also Asian equity funds, in particular Japan, as the ripple effect of trade tensions between the US and China started to be felt. In contrast, mixed asset and bond funds attracted strong inflows.”
The strong performance of UK equity investors is particularly notable in the context of Woodford’s struggles and eventual suspension of its equity fund.
Laura Suter, personal finance analyst at investment platform AJ Bell commented on the developments, noting that the total of £316m was the largest total “in more than three years since before the Brexit referendum
She added: “At the same time, investors have shifted away from Global equity markets, as inflows almost halved in May compared to the previous month. It still remains the most loved sector, with £4.5bn of inflows over the past year.
Ms Suter also weighed in to the active versus passive debate and analysed how the results reflected the situation in the industry.
She said: “Active fund managers continue to feel the heat from the rise of passives, with tracker funds seeing their highest inflows, at £2.3 billion for the month. At the same time total funds under management in the industry flatlined, meaning that tracker funds now make up a sixth of all funds.”
