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Where is investors’ money going?

This article is part of
Guide to the Mixed Investment sectors

What is clear is the popularity of the Mixed Investment sectors.

At the time of writing, the IMA Mixed Investment 20 per cent to 60 per cent Shares sector - formerly Cautious Managed - has topped platform provider Cofunds’ leader board for six consecutive months. For the most recent month, it accounted for more than 94 per cent of net sales.

Graham Venn, head of commercial at Cofunds, says the sector has “continued to attract high inflows in the past six months of 2013”, suggesting that this perhaps reflecting investors’ “ongoing caution”.

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“In comparison the same sector also topped the leaderboard early last year for five out of the six months,” he adds.

The anxiety over the deteriorating risk/reward case for investing in funds with a strong focus on fixed income is requiring investors seeking growth to have a reasonable equities exposure, but uncertainty continues to precipitate prudence and drive money away from sectors with a weightier equities holding.

The IMA’s own statistics showed the sector was its second best-selling sector in May 2013, with net retail sales of £231m.

The top selling sector was Targeted Absolute Return - formerly known simply as Absolute Return, with the name change similarly being driven by complaints over misrepresentation of risk - which attracted net retail sales of £255m, well above its average for the last 12 months of £97m.

This was the second time this sector had been the best-seller in 2013, after it topped the table in March.

In 2012, the IMA’s Mixed Investment 20 per cent to 60 per cent Shares sector was the third best-selling sector with net retail sales of £1.8bn. Its predecessor, Cautious Managed, ranked as the top selling sector in 2011 with net retail sales of £3.4bn.

The sector came behind Strategic Bond, which was the best selling sector for the first time with net retail sales of £2.2bn, having been in second place in 2011. Corporate Bond was the second best selling sector with net retail sales of £1.9bn.

This sector was the top selling sector for six months in 2012, however significant outflows in November and December prevented it being the overall best selling sector for the year. Bond sectors generally have continued to see more modest inflows in 2013.