Larger managers at risk of outflows: Pridham

The research, which looks at firms’ gross and net retail sales on a quarterly basis, noted that the first quarter was the worst in 20 years in terms of net retail sales.

On a gross basis, BlackRock attracted the highest sales, of £2.4bn, followed by Standard Life Investments, Fidelity, Invesco Perpetual and Henderson Global Investors.

However the report warned that bigger groups could also be vulnerable to a reversal of fortunes because of the maturity of their business.

“Larger managers continue to be most popular, attracting the highest gross sales, but the maturity of their business makes them more susceptible to outflows and heightened switching activity,” the report said.

“Newer and smaller groups have less mature business on their books so their net positions look better, even though their current sales are not as high as some of the more established groups.”

Boutique Fundsmith achieved the highest net retail sales, with £604m in net inflows, followed by Woodford Investment Management with an estimated £550m.

Both firms are relatively new to the asset management scene. Report author Helen Pridham said Terry Smith’s “simple investment process” acted as a safe pair of hands for investors.

However, one large group performing particularly well was Fidelity. The report said its fourth place in terms of gross flows in Q1 was its highest position in over ten years.

“Fidelity has seen the wheel of fortune turn back in its favour over the last two years thanks to improved investment performance and the appeal of products such a Moneybuilder Income and Global Dividend,” Ms Pridham said.

Other top performers by net retail sales included Standard Life Investments, Fidelity, Legal and General Investment Management, BlackRock and Miton. However, on Miton, the report warned the loss of two of its star managers – George Godber and Georgina Hamilton – meant it would experience outflows in Q2.

The report attributed the difficult quarter for the industry to “a bad start to the year on stock markets fuelled by fears about China, followed by the worries and uncertainty caused by the beginning of the European referendum campaign”.