Demand for investment trusts soars in 2013

Sales of investment trusts have risen significantly following the introduction of the RDR at the beginning of 2013, according to data compiled for the Association of Investment Companies (AIC).

The AIC, the investment trust trade body, said adviser purchases of investment trusts hit a record quarterly figure of £83.3m in the third quarter of the year, according to data collated by Matrix Solutions. This brought the 2013 total to £241m in the first nine months of the year, already a 66 per cent increase on the 2012 12-month total.

AIC director general Ian Sayers said: “It’s early days but [the] RDR appears to be having an impact on the industry. It’s really positive that we’ve seen such a significant increase in adviser platform purchases of investment companies this year, albeit from a low base.”

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In spite of the record total sales, the 2013 figure is still significantly lower than the volume of trading in other product types. Open-ended funds registered sales of between £6bn and £8bn in each of the first three quarters of this year, while exchange-traded funds and passive products also comfortably outsold investment trusts.

The year has been dominated by the debate about platform access to investment trusts. The ‘big three’ platforms - FundsNetwork, Skandia and Cofunds - have all shelved plans to add investment trusts to their product ranges, citing lack of demand.

Meanwhile, wrap platforms Nucleus and Ascentric are eating into Transact’s market share of adviser investment trust sales. While Transact users still account for more than half of investment trust trades counted by Matrix, Ascentric now accounts for more than 20 per cent.

A total of six platforms provided data on investment trust purchases - Transact, Nucleus, Ascentric, Raymond James Investment Services, Axa Elevate and Novia.