Dividend payouts have continued to be popular among advisers and direct investors, with property, equity income and absolute return funds taking high inflows, data has shown.
The latest data from trade body the Investment Association revealed that, by the end of August, the UK Equity Income sector remained the top-selling sector with net retail sales £520m.
Property funds brought in £184m net retail sales, ranked fourth in the top five sectors according to net retail sales.
However, there were high outflows in net retail sales, particularly in the fixed interest sector, which saw its largest outflow since June 2013, at £333m, while investors also pulled out of Asian equity funds, to the tune of £218m.
Total net retail sales for all sectors stood at £690m, the lowest since January 2015.
Investment Association chief executive Daniel Godfrey said: “Sales dropped in August to £690m, the lowest since January 2015, after an exceptionally strong July when we saw net retail sales of £3bn.
“Market volatility may have made investors more cautious in August, reinforcing a tendency for sales to dip over the summer period.”
In terms of asset allocation, investors appear to be sticking with equities – particularly equity income funds – while withdrawing money from bonds, perhaps in expectation of an interest rate rise.”
Investment Association sector | Ranking in August 2015 | Net retail sales in August 2015 | Asset class |
UK equity income | 1 | £520m | Equity |
Targeted absolute return | 2 | £243m | Other |
Europe excluding UK | 3 | £220m | Equity |
Property | 4 | £184m | Property |
UK all companies | 5 | £173m | Equity |
Source: Investment Association
The data also showed that, in August 2015, net retail sales of funds in Isas provided by fund companies and the five fund platforms that feed data to the IA (Cofunds, Fidelity, Hargreaves Lansdown, Old Mutual Wealth and Transact) were £51m, compared with £215m in August 2014.
The top three best-selling sectors for Isas based on the five fund platforms were: UK equity income (£91m net sales); property (£28m net sales) and mixed investment 20-60 per cent shares (£22m net sales).
Adviser view
Jason Hollands, managing director, business development and communications for London-based Tilney Bestinvest, said: “We are overweight physical commercial property in our managed portfolios.
“We see this as a better proxy for playing the relatively robust UK domestic economy than the UK equity market, where earnings are largely overseas.”
