UK gets investing again as £4bn ploughed into retail funds

Retail investors ploughed a massive £4bn into retail funds in April 2020 as they took advantage of investment opportunities, reversing the trend of record outflows for the month prior.

Sales of active funds were nearly double those of tracker funds – coming in at £2.7bn compared to £1.4bn. The new tax year in also saw £1.1bn invested in ISA funds.

Equities were very much the order of the day for investors as the asset-class recorded £2.4bn in net retail sales. Sales by asset class were as follows (denoted in net retail sales):

  1. Equity: £2.4bn
  2. Fixed Income: £903m
  3. Mixed Asset Funds: £872m
  4. Money Market Funds: £154m
  5. Property Funds: £52m
  6. Other including Absolute Return Funds: the only class to see outflows, £172m to be precise.

In terms of the top-selling equity fund regions. Global topped the charts with £1.2bn, followed by UK funds with £1bn and Asia with £221m. North America, Japan and Europe funds bucked the trend with outflows.

Commenting on the trends, the Investment Associated noted:

“After record outflows from the fund market as global lockdown measures began in March, savers returned to put £4 billion into retail funds in April. Part of this comeback was fuelled by record inflows into responsible investment funds in April. The crisis has brought a new momentum to the subject of responsible investing, with asset owners and retail investors asking more about their investment manager’s environmental, social and governance approaches.

Both active and passive funds benefited from the return to inflows in April. Bond funds gathered £903 million in assets, suggesting some of March’s record redemptions flowed back quickly as we moved past the initial market turbulence of the COVID-19 pandemic. “

Chris Cummings, Chief Executive of the Investment Association

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