UK funds experienced the worst year on record for net outflows in 2023, according to the annual Pridham Report.
The report, which has been an annual feature since 1997, showed that passive funds were the big beneficiaries of market uncertainty. Almost three-quarters (71%) of new capital pulled in by the top four managers were passive funds.
2023 also marked the first year of net withdrawals for ESG funds.
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There were fewer precedents in terms of the rankings for individual firms. For the tenth year in a row, BlackRock attracted the most new business with £30.1 billion (US$38 billion) in gross retail sales and £6.4 billion in annual net flows.
There was also a modest rise in gross annual flows compared to 2022, although they remained below the levels recorded in 2020 and 2021.
According to report editor Anna Pridham, more uncertainty is expected in 2024 with a general election looming and economic volatility continuing.
“However, with the prospect of easing inflation and anticipated interest rate cuts, investors may be finally ready to deploy the record amounts of cash waiting in the wings,” she said. “The fund groups with the right products stand to benefit.”
