Savers go global, as diversification grows in October

Global opportunities

UK savers prioritised diversification in October, as Global (equity) and Global Bonds became the top two best-selling IA sectors respectively, according to the latest figures published by the Investment Association (IA). 

Responsible investment funds continued to attract healthy net retail sales, reaching GBP1 billion in October for the first time in a month, while overall net retail sales reached GBP2.5 billion in October 2020, in another strong month of inflows.

Mixed asset funds became the best-selling asset class for the first time since February 2020, with net sales of GBP1.2 billion in October.

The UK Equity Income sector experienced a record net retail outflow of GBP644 million in October.

Chris Cummings, Chief Executive of the Investment Association, says: “As a second wave of Covid-19 infections became more apparent in October, savers looked to diversify their portfolios by backing global stocks and bonds in an effort to weather the storm. Investors also opted for the relative safety of UK gilts.

“Despite growing Covid-19 uncertainty in October, it is encouraging that savers continued to put their money in funds as net retail sales reached a strong GBP2.5 billion, buoyed in large parts by consistently strong sales into responsible investment funds.”

The five best-selling Investment Association sectors for October 2020 were:

• Global was first with net retail sales of GBP869 million.
• Global Bonds was second with net retail sales of GBP793 million.
• Mixed Investment 40-85 per cent Shares followed with net retail sales of GBP569 million.
• UK Gilts was fourth with net retail sales of GBP366 million.
• Volatility Managed was fifth with net retail sales of GBP251 million.
• The worst-selling Investment Association sector in October 2020 was UK Equity Income with an outflow of GBP644 million.

Mixed Asset was the best-selling asset class in October 2020 with GBP1.2 billion in net retail sales.

Fixed Income was the second best-selling asset class, with GBP698 million of inflows.

Equity funds experienced GBP456 million of inflows.

Money Market funds however experienced GBP262 million in net retail inflows.

Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) experienced GBP129 million of net retail inflows.

However, Property funds experienced net retail outflows in October of GBP163 million.

Global was the best-selling equity fund region in October 2020, with net retail sales of GBP755 million.

Asia funds were second, seeing net retail inflows of GBP202 million.

North America funds came next with net retail inflows in October of GBP127 million.

Japan funds experienced net retail outflows of GBP19 million.

Europe funds saw net retail outflows of GBP186 million.

UK funds saw net retail outflows of GBP782 million.

Tracker funds saw a net retail inflow of GBP1.7 billion in October 2020. Tracker funds under management stood at GBP229 billion as of the end of October. Their overall share of industry funds under management was 17.6 per cent.

Responsible investment funds saw a net retail inflow of GBP1.1 billion in October 2020. Responsible investment funds under management stood at GBP38.4 billion as of the end of October. Their overall share of industry funds under management was 3.0 per cent.

In October, gross retail sales for UK fund platforms totalled GBP13.5 billion, representing a market share of 52 per cent.

Gross retail sales through Other UK Intermediaries including IFAs were GBP6.4 billion, representing a market share of 24 per cent.

Direct gross retail sales in October were GBP1.3 billion, representing a market share of 5 per cent.