The report, drawn from Q4 2011 figures produced by Skandia’s UK-based Investment Solutions platform, also found, as well as a near-25% drop in the sale of European equity funds, sales of emerging market equity funds decreased by 19% compared to the third quarter of last year.
In contrast, and perhaps encouragingly, the report found UK investors were again investing in fixed interest products, with sales of UK and overseas fixed interest funds increasing by 7% and 28% respectively. It should also be noted that sales of overseas fixed interest funds increased from a low base and that the UK fixed interest sector has now been the highest selling sector since the last quarter of 2008, now accounting for nearly 23% of all fund sales through the Skandia platform.
Another sector benefiting from the continued economic uncertainty, are managed funds which were the second most popular sector in the last quarter of 2011, accounting for 16% of sales, a 14% increase on the previous quarter.
Skandia suggests the sector may have been helped, in part, by the trend towards risk-targeted managed funds and highlights as an example its own range which it said is now within the top 5% of fund sales.
Skandia’s Graham Bentley said the flight away from European equities is a “short term knee jerk reaction in response to negative sentiment created by the eurozone debt crisis”, adding that in actual fact the FTSE Eurotop 300 index is up about 10% since early October.
“In times of stock market uncertainty it is crucial that investors are in well balanced portfolios that match their attitude to risk over the long term,” said Bentley.
“This should give them the confidence to ride out short term volatility. Fixed Interest funds can be used to reduce overall portfolio risk if that is desired, which could account for their continued popularity.”
