Highest ever funds under management for funds of funds, ethical and tracker funds

11 May 2010

Quarterly fund statistics for Funds of Funds, Tracker and Ethical data - Quarter 1 2010

The Investment Management Association (IMA) today publishes its quarterly figures for Funds of Funds, Ethical and Tracker funds for Quarter 1.

Key findings for 2010:

The highest funds under management on record for Funds of Funds, Ethical and Tracker funds

A mixed Quarter for net retail sales of these categories:

strongest 1st Quarter ever for Funds of Funds
low sales of Ethical Funds
the highest net outflow on record for Tracker Funds

Richard Saunders, Chief Executive of the IMA, commented:

"In the first Quarter, sales of Funds of Funds continued to be strong, accounting for about £1 in every £10 of gross retail sales. Net retail Tracker Fund sales slipped into negative territory again in March, after two years of increasing sales, and Ethical Funds were steady at just under 1% of industry gross sales. Rising markets took all three groups to record levels of funds under management."

FUNDS UNDER MANAGEMENT	Q1 2010	Q1 2009	Difference
Funds of funds	£46.5 billion	£28.9 billion	+ £17.6 billion	+ 61%
Ethical funds	£5.9 billion	£4.1 billion	+ £1.8 billion	+ 43%
Tracker funds	£29.5 billion	£18.6 billion	+ £10.9 billion	+ 59%
All funds	£510.9 billion	£348.9 billion	+ £162.0 billion	+ 46%

RETAIL SALES (NET)	Q1 2010	Q1 2009	Difference
Funds of funds	£1,212 million	£413 million	+ £798 million
Ethical funds	£16 million	£49 million	- £32 million
Tracker funds	-£196 million	-£32 million	+ £164 million
All funds	£5,502 million	£4,121 million	+ £1,381 million

FUNDS OF FUNDS

Strongest 1st Quarter on record for net retail sales

Funds under management the highest ever

Net retail sales of Funds of Funds totalled £1.2 billion - the highest ever 1st Quarter and the second highest
Quarter overall (just behind the 4th Quarter 2009 which totalled £1.4 billion). It was nearly three times the level achieved in the 1st Quarter last year.

Funds of Funds net retail sales accounted for £1 in every £5 invested in all funds in the 1st Quarter of 2010 (22% of net retail sales) and £1 in every £10 (10%) of gross retail sales.

Funds under management for Funds of Funds are the highest on record at £46.5 billion, 61% up on the 1st Quarter last year. Funds of Funds represent £1 in every £11 of all funds under management (9%). This is double the proportion it was ten years ago (4.4%), when the total for Funds of Funds under management stood at just £11.8 billion.

The Balanced asset class accounts for the highest proportion (62%) of total funds under management for Funds of Funds, with Balanced Managed the highest sector (27% of all Funds of Funds). When it comes to sales, the Balanced asset class is still the most popular, accounting for just over half (52%) of all net retail sales in Quarter 1 2010. Cautious Managed was the highest selling sector, accounting for 34% of all Funds of Funds net retail sales in Quarter 1.

The majority of Funds of Funds money is invested in the funds run by other firms (external), 56% of funds under management and 69% of net sales in the 1st Quarter of 2010. The total invested in external funds at the end of the 1st Quarter 2010 was £26.1 billion, eleven times the level it was ten years ago (£2.4 billion).

THE LAST FIVE YEARS OF FUNDS OF FUNDS SALES (NET RETAIL)

	2005	2006	2007	2008	2009
Q1	£359 million	£901 million	£428 million	£237 million	£413 million
Q2	£757 million	£970 million	£534 million	£504 million	£1,039 million
Q3	£514 million	£584 million	£348 million	£74 million	£1,055 million
Q4	£635 million	£607 million	£301 million	£183 million	£1,387 million
Total	£2,248 million	£2,983 million	£1,636 million	£998 million	£3,894 million

ETHICAL FUNDS

Net retail sales of Ethical funds in the 1st Quarter 2010 were one of the lowest on record

Ethical funds - funds under management, the highest on record

Sales of Ethical funds totalled £16 million in the 1st Quarter of 2010, (26th out of the 33 Quarters on record)

*. This is significantly lower than in the previous two Quarters (Q3 £59 million and Q4 £62 million), but higher than the 2nd Quarter in 2000, when Ethical Funds experienced their only quarterly outflow of funds (£14 million). Ethical sales represented 0.7% of gross retail sales, a level that has remained broadly steady over the past year.

Over the years, net retail sales of Ethical funds have varied widely, with 2007 being the highest year on record, with a total of £386 million. The lowest year on record since 2000 was 2004, when net retail sales totalled £16 million. Prior to then, the lowest was 1992 with £10 million.

THE LAST FIVE YEARS OF ETHICAL FUND SALES (NET RETAIL)

	2005	2006	2007	2008	2009
Q1	£7 million	£34 million	£100 million	£28 million	£49 million
Q2	£23 million	£26 million	£138 million	£50 million	-£14 million
Q3	£28 million	£23 million	£136 million	£21 million	£59 million
Q4	£28 million	£53 million	£100 million	£55 million	£62 million
Total	£86 million	£136 million	£473 million	£154 million	£155 million

Ethical funds under management totaled £5.9 billion, the highest on record and 43% up on the 1st Quarter last year.

TRACKER FUNDS

Tracker fund net retail outflow the highest on record

Tracker funds - funds under management, the highest on record

Net retail sales of Tracker Funds saw a net outflow of £195 million in the 1st Quarter of 2010, the highest outflow on record. (The previous highest outflow of £187 million occurred in Quarter 1 2006.) This reverses the trend experienced in the last three quarters, when net retail sales for Trackers have been positive. However the majority of quarters over the past five years have seen outflows.

THE LAST FIVE YEARS OF TRACKER FUND SALES (NET RETAIL)

	2005	2006	2007	2008	2009
Q1	-£1million	-£187 million	-£4million	£62 million	-£32 million
Q2	£53 million	£27 million	-£14 million	-£1 million	£280 million
Q3	-£126 million	-£49 million	-£29 million	-£34 million	£79 million
Q4	-£23 million	-£69 million	-£59 million	£279 million	£78 million
Total	-£97 million	-£279 million	-£106 million	£307 million	£406 million

Net retail sales comprise total retail sales minus repurchases, thus the figures can result in a negative figure or outflow.

Tracker funds under management reached £29.5 billion, the highest on record and 59% up on the 1st Quarter last year.

Of the 71 Tracker funds, 44 (62%) track UK indices, mainly the FTSE All Share and the FTSE 100 indices. The remainder track a wide spread of other indices, including Europe, Global, Japan, Asia Pacific and the US.

* The IMA first began to track and publish statistics on Funds of Funds, Ethical and Tracker funds in 1992.

For more details on the figures given in the press release, please see the tables on the links below.

Notes:

All tables

1. Summary

2. Fund of funds - funds under management by asset type

3. Fund of funds - sales

4. Fund of funds - sales by asset type

5. Tracker and Ethical funds - funds under management and sales

Gross retail sales are new sales or switches recorded, repurchases are when investors sell their investments. Net retail sales comprise total sales minus repurchases.

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