Familiar straggler emerges as fund flow bounce continues; Aim portfolios steal a march
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The plain sailing continues
July arrives, and with it the first chance to look at latest fund flow figures for May. Such is the nature of reporting delays in the investment industry. The story being told is a familiar one either way: net sales remain healthy overall, but UK equities remain a particular outlier.
Sales of UK Equity Income funds were in the red for the 12th successive month, while earlier signs of life for UK All Companies products have quickly withered away again. With net flows returning to European equity funds for the first time this year, that meant the UK was the only main equity region to see redemptions on the month.
There were few dramas in the fixed income or multi-asset groupings either; overall appetite here remains as resilient as it does for equity funds in general, with global inflation-linked bonds a particular point of interest in May.
Similarly trackers and responsible investment funds also continued to see sizeable levels of interest. Net sales of tracker funds were up almost 30 per cent compared with the same month last year; net sales of responsible funds were more than 40 per cent higher.
That leaves product wrappers as the only area in which preferences have shifted of late.
Last month we noted the huge £1.5bn worth of net retail fund sales via Isas recorded in April. The end of Isa season meant May’s figure was never likely to compare. But a £360m net flow was at least enough for Isas to beat sales into pension products for the second consecutive month – and only the second time in the past year.
Aiming higher
One area we didn’t mention in our assessment of year-to-date performance earlier this week was the Alternative Investment Market.
We noted last year that Aim portfolios proved an unlikely winner from the pandemic-induced market slump seen in March 2020. But given the way returns roared back then, it’s no surprise that relative performance has cooled more recently as other parts of the UK market start to flourish.
This year, the Aim All-Share has returned 8.4 per cent over the first six months. That’s below the 11 per cent produced by the FTSE All-Share, and the FTSE Small Cap benchmark’s 13 per cent return - but not by much. And client interest in such shares has continued to rise.
In the D2C world, Aim listings still regularly sit in Hargreaves Lansdown’s monthly lists of its most traded shares. More to the point, wealth managers’ own Aim portfolios are also seeing interest take off. Hawksmoor said this morning that assets in its Aim portfolio service – launched back in 2016 - had risen almost 40 per cent since the start of the year.
Among other catalysts, the DFM pointed to the fact that Covid-19 has “brought the issue of estate planning closer to home for many families”. That will always play a major role in clients’ thinking when it comes to Aim. Factor in the performance of the market in recent times, and it’s clear that ESG portfolios aren’t the only specialist offering to be capturing client attention at the moment.
Back once again
It took just three days for Martin Gilbert’s AssetCo to spend the £31m it had earmarked for M&A opportunities. The company has taken a 30 per cent stake in Parmenion following its acquisition by Preservation Capital Partners, which completed today.
Needless to say, Gilbert’s interest in the platform/DFM goes back a long time. Aberdeen, after all, bought Parmenion under his watch in 2016. The latest deal only adds to the recent to-ing and fro-ing, but the company can at least be assured that its new owner values what it has to offer. Whether or not its new private equity backers PCP always intended on this outcome is a more open question.
