Nearly six in ten (59%) of the UK’s largest fund groups achieved net sales growth in the second quarter of 2024, marking the third consecutive quarter where this figure has surpassed 50%, according to data.
The report from ISS Market Intelligence, a provider of data, insights and market engagement solutions, has shown that the trend underscores a resurgence in investor confidence, with 43% of these groups reporting positive retail net flows—the highest proportion since Q3 2021. This is an improvement from just 21% of firms recording positive net sales in Q4 2023.
According to the research, this indicated a boost in investor sentiment during the individual savings account (ISA) season, despite ongoing market volatility.
The data, derived from monitoring sales and asset trends across more than 40 of the UK’s largest fund groups, indicated a marked shift in sentiment during the individual savings account season, despite ongoing market volatility. Passive funds were the primary drivers of this positive activity, particularly passive equity funds, which garnered over £5 billion in net sales. According to the findings, the top five best-selling fund groups in Q2 were all leaders in passive investing.
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While passive strategies dominated the quarter, active managers also found success in specific market areas. JP Morgan Asset Management climbed to sixth place in the retail rankings, buoyed by the successful launch of a UK-domiciled version of their Global Focus fund, which emerged as the best-selling fund by net sales in Q2, surpassing £1 billion in assets under management.
Equity fund sectors focused on global and North American markets maintained their stronghold, being the top sellers for 80% of the largest equity houses. Meanwhile, Artemis continued to attract investors to less mainstream equity sectors, with their UK Select fund contributing to a 9th-place ranking in retail gross sales.
In the fixed income domain, Sterling corporate bond funds were the top choice for eight of the top ten best-selling bond fund houses, boosting the results of major players like BlackRock, Legal and General Investment Management and Royal London. According to data, Vanguard excelled in mixed asset fund sales and secured the second spot in gross and net retail sales, helping to push the report’s coverage to over £1 trillion in assets.
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Benjamin Reed-Hurwitz, Emea research leader at ISS MI and lead author of the Report, said: “There is a sense of guarded optimism among fund groups at the end of the second quarter. Inflows were steady and there has been a slowdown in outflows among the UK’s largest fund groups, suggesting that investor confidence is improving.
Reed-Hurwitz added that despite the recent impact of passive funds on active managers, there’s an expectation that expanding investment opportunities, especially in equity, will allow many active styles to thrive in the coming quarters.
