Over half (54%) of fund groups in the UK reported positive net sales in the first quarter, yet fell £1bn throughout the period overall, according to the latest Pridham Report.
However, EMEA Research Leader at ISS MI Benjamin Reed-Hurwitz said the loss “was negligible compared to the total money deployed in markets”.
“Despite a challenging macroeconomic backdrop – with sticky inflation, shifting interest rate expectations and ongoing geopolitical tensions – the first quarter was notably calm,” he said.
“It felt like going back in time 12 months, with elevated retail gross sales but muted net sales. Flows were slightly negative overall, but the scale of outflows was limited and certainly not indicative of widespread investor panic.
“Instead, investors and asset allocators played it safe, generally making reallocations at the margins while they digested what recent geopolitical developments mean for long-term return outlooks.”
Vanguard had the highest net sales throughout the quarter of £1.3bn, which Benjamin Reed-Hurwitz credited to the popularity of its LifeStrategy 80% Equity fund.
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Artemis came in at a close second with net sales of £1.1bn followed by HSBC Asset Management at £1bn.
Reed-Hurwitz highlighted Royal London Asset Management and BNY Mellon as two asset managers who benefited from heightened investor appetite for fixed income.
They made £701m and £268m respectively throughout the quarter, marking BNY’s highest onshore retail sales in a decade.
Reed-Hurwitz said the net sales of these firms suggest that investor’s risk appetite remained fairly resilient despite market uncertainty.
“This quarter’s data shows that flows weren’t just concentrated in a handful of categories or groups,” he added. “Instead, growth was spread across a diverse mix of strategies and asset classes.
“As well as short-term fixed-income and money market funds, we also saw some broadening of equity demand with a number of equity income and even emerging market funds attract net sales.
“While flows appear static in in the first quarter, beneath the surface things were far more dynamic. There’s active capital allocation going on – it just isn’t going on in plain sight.”
This story was written by our sister title, Portfolio Adviser
