Adviser trust purchases triple post-RDR

Adviser trust purchases triple post-RDR

The number of investment trusts bought by advisers last year was triple the amount purchased the year prior to the Retail Distribution Review (RDR), the Association of Investment Companies (AIC) has said.

Advisers pushed a total of £687m into investment trusts in 2015, a 43 per cent increase from £480m in 2014 and nearly triple the £237m in 2012, before the RDR came into effect, according to AIC data.

In 2012 RDR banned commission payments to advisers for buying unit trusts, putting investment trusts on a more even playing field with their open-ended rivals.

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Ian Sayers, chief executive of the AIC, said: “It’s highly encouraging that adviser purchases of investment companies in 2015 are at record levels and have nearly tripled since before RDR. It’s also really significant that the number of adviser firms using investment companies hit an all-time high.”

The AIC noted 2015’s figures are somewhat skewed by the launch and popularity of Neil Woodford’s Paitient Capital trust in April 2015.

The trust has amassed over £800m in its short 12-month existence, but has lost 7.1 per cent for investors in the same period.

However, the AIC said it would still would have been a strong year without Woodford’s influence. Omitting Q2 altogether, flows for the other three quarters were still up 17% on the same three quarters of 2014, from £354m to £415m.

Overall, the Global sector was the most purchased investment trust grouping, accounting for 16 per cent of total sales, followed by 12 per cent in UK Equity Income, and 10 per cent in UK All Companies.

Transact was the most popular platform for trust purchases with a market share of 48 per cent. Alliance Trust came in second place at 18 per cent of the market, and Ascentric in third place with 16 per cent.