UK investors pumped £389m into retail funds in November but it was only the second month of positive net retail inflows in 2022.

New data from the Investment Association (IA), the fund managers’ trade body, showed that investors returned to funds in November after a six month gap.

The last month of net retail inflows in 2022 was £608m in April during the ISA season during a challenging year for the sector.

Despite the more positive news on fund flows, investors dumped investments in UK All Companies funds in November 2022. UK All Companies experienced outflows of £976m as investor sentiment turned negative. 

Key stats for November 2022 included:

• Fixed Income funds returned to inflows at £1.3 billion, following outflows of £548 million in the previous month, driven by Corporate Bond and £ Corporate Bond sales
• Equity funds saw outflows of £486 million, despite strong sales for North American equity funds, which saw inflows of £1.3 billion
• Tracker fund inflows were £1.6 billion in November, the highest inflow into tracker funds in 2022
• North America was the bestselling IA sector in November, with inflows of £1.3 billion, while UK All Companies saw the highest outflow in November with outflows of £976 million
• Responsible investment funds returned to outflows in November at £153 million, following October’s modest inflow.

Chris Cummings, IA chief executive, said: “Funds saw their first net retail inflow in November since April. This is after six months of consistent outflows in 2022, which peaked at £7.5 billion in September in the aftermath of the mini budget.

“Fixed income funds dominated inflows; with rising interest rates beginning to cool inflation, at least in the US, bond investors will ultimately benefit from higher rates of fixed interest. Investors favoured corporate bond funds in November.

“However, the outlook for investors remains challenging and sales to equities reflected a more mixed picture. Outflows from UK and European equity funds accelerated to £1.1 billion and £834 million respectively, reflecting the challenging economic outlook in these regions.”

BEST SELLING INVESTMENT ASSOCIATION SECTORS 

The five best-selling Investment Association sectors for November 2022 were: 

1. North America with net retail sales of £1.3 billion. 
2. Corporate Bond was second with net retail sales of £720 million. 
3. £ Corporate Bond followed with net retail sales of £238 million. 
4. Global Inflation Linked Bond was fourth this month with net retail sales of £205 million. 
5. Volatility Managed remained in fifth with net retail sales of £149 million. 
    

NET RETAIL SALES BY ASSET CLASS

Fixed Income funds saw inflows of £1.3 billion. 

Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £329 million in inflows.

All other asset classes experienced outflows this month.

Property funds experienced £62 million in outflows.

Mixed Asset funds saw outflows of £217 million.

Equity funds saw outflows of £486 million.

Money Market saw outflows of £508 million.

NET RETAIL SALES OF EQUITY FUNDS BY REGION 

North America funds saw net retail inflows of £1.3 billion.

Asia funds saw inflows of £83 million.

Global funds saw inflows of £58 million.

All other equity regions experienced outflows this month.

Japan saw outflows of £26 million.

Europe funds saw outflows of £834 million.

UK funds saw outflows of £1.1 billion.

TRACKER FUNDS 

Tracker funds saw net retail inflows of £1.6 billion in November 2022. Tracker funds under management stood at £289 billion at the end of November. Their overall share of industry funds under management was 20.8%.

RESPONSIBLE INVESTMENT FUNDS 

Responsible investment funds saw a net retail outflow of £153 million in November 2022. Responsible investment funds under management stood at £92 billion at the end of November. Their overall share of industry funds under management was 6.6%.  

GROSS RETAIL SALES BY DISTRIBUTION CHANNEL 

Gross retail sales for UK fund platforms totalled £13.1 billion, representing a market share of 53.5%.

Gross retail sales through other UK Intermediaries including IFAs totalled £5.7 billion, representing a market share of 23.1%.

Gross retail sales for Discretionary Managers totalled £2.2 billion, representing a market share of 9.0%.

Direct gross retail sales totalled £758 million, representing a market share of 3.1%.

In November, execution-only intermediaries totalled £115 million in gross retail sales and accounted for 0.5% of the market.