Adviser and wealth manager purchases of investment trusts through platforms reached a record value of £120.9m in the second quarter of 2014, research has found.
According to a report commissioned by the Association of Investment Companies using Matrix Solutions’ Financial Clarity software, this means yearly purchases have more than doubled since the implementation of the RDR.
This was an increase on the £93.7m for the second quarter of 2013. According to the data, purchases of investment trusts in the 12 months to June 2014 reached £422.9m, a 48 per cent increase on the £285.9m for the 12 months to the end of June 2013, and up 112 per cent on the £199.3m for the 12 months to June 2012.
Sales of investment trusts decreased slightly in the second quarter to £72.1m from a high of £77.3m in the previous quarter.
The Global and UK Equity Income sectors were again the most popular for advisers and wealth managers, accounting for 18 per cent and 16 per cent of the total purchases of investment trusts in second quarter 2014 respectively.
Transact and Ascentric were the top platforms for purchases, with market shares of 46 per cent and 22 per cent respectively in the first half of 2014.
In this period, Alliance Trust Savings had a 17 per cent market share.
Total purchases through platforms in the second quarter hit £23.4bn, an increase on the £22.1bn for the previous quarter.
Ian Sayers, director-general of the AIC, said: “Adviser purchases of investment companies have increased every quarter but there is still plenty of demand for training.
“This autumn our adviser education programme continues with online and face-to-face seminars and we have recently launched a new introductory guide on investment companies.”
This came as Morningstar provided research that showed there has been more transparency from investment trusts over the past year, helping investors to better gauge performance.
At 31 August 2014, of the 122 investment trusts disclosing holdings to the market monthly, more than half now release this data within 30 days of each month-end. Two-thirds release this data within 60 days of each month-end, the research found.
Jackie Beard, director of closed-end fund research, said: “As the shareholder base for investment trusts continues to evolve, and in an age where holdings information is so readily available for open-end funds, investors are rightly expecting far greater transparency from their investment trust providers.
“The data shows that greater transparency has come about. We are pleased that shareholders are now better positioned to understand their investment trust holdings and how those holdings fit within their overall portfolios.”
Adviser view
Tom Dean, chartered financial planner for London-based Plutus Wealth Management, said: “It would be interesting to see whether people are choosing investment companies over unit trusts or whether more money is coming into the sector.”
Key facts
£23.4bn: Value of total purchases of investment trusts through platforms in H1 2014
£120.9m: Value of adviser and wealth manager purchases of investment companies using platforms in Q2 2014
£93.7m: Value of adviser and wealth manager purchases of investment companies using platforms in Q2 2013
46%: Transact’s share of investment trust purchases on-platform
Source: AIC
