FTAdviser.com

Advertising

The analytics and data provider said the UK would grow at a compound annualised rate of 9.9 per cent, slower only than Germany.

Lipper estimated UK assets under management would reach €884bn (£702.5bn) by 2012, up from €550bn at the end of 2007.

In 2007, the UK sold €25.5bn of funds, more than anywhere else in Europe. Lipper said tax-efficient savings schemes had enabled consistent inflows, particularly in the case of retirement-based programmes.

In terms of asset classes, UK investors are still keener on equities than other Europeans, according to the research, but sales of bond, multi-asset, total return and absolute return funds have picked up.

Lipper said equities constituted 72 per cent of UK assets under management in 2007 following an annual decline from a high of 88 per cent in 1996.

Bella Caridade-Ferreira, publisher and editor at Lipper Feri, said: "The sales mix is likely to veer towards more defensive options, but regular savings will continue to underpin the fund industry."

UK distribution still differs from the bank-driven strategy on the continent, with IFAs involved in 80 per cent of UK transactions. As IFAs favour domestic products with successful histories, UK companies have launched fewer funds than in Europe, and the UK market share of overseas funds is still low at 5.6 per cent.

Lipper said this trend may change as platforms start featuring more portfolios from abroad.