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Redemptions still ‘too high’ for Aviva investors

Mark Wilson, group chief executive officer at Aviva, said the group’s investment arm continues to make progress on its turnaround, but that redemptions remained ‘too high’.

Redemptions still 'too high' for Aviva investors


The group saw gross sales of £4bn ($6.1bn, €5.6bn) in the quarter to 30 September, which Wilson described as ‘encouraging’, but it also saw net redemptions of £4.5bn. Wilson said margins on new funds are higher than those on departing funds.

He added that the AIMS flagship range of funds continued its strong performance versus peers during the period and now has £1.9bn of funds under management. Performances were broadly flat versus the FTSE 100, which has dropped 6%.

The group’s Target Return Fund is now £989m in size and has seen a rise of 8.3% over the past 12 months (6.6% for the 12 months to end September). This compares favourably to the wider IA Targeted Absolute Return sector, which is up an average of 3.8%. 

The group said its partnership with Virtus Investment Partners in the United States launched successfully and it was looking for more international distribution agreements.

Aviva reported that its platforms continue to grow with over £2.2bn of net inflows in the nine months to 30th September 2015, taking AUM to £7.3bn. The group launched a direct-to-consumer platform in June of this year, incorporating a general investment account, an ISA and a self-invested personal pension (SIPP). There are plans to develop this further, with additional areas such as drawdown.

Elsewhere, Wilson said its purchase of Friends Life is ‘everything we expected it to be’. He added that the group had now achieved £91 million of savings against our target of £225m: “At the same time our UK Life business continues to grow and our customers are responding positively to the full range of pensions freedoms we offer.”

Aviva remains an important holding for a number of fund managers, including Clive Beagles and James Lowan on the JOHCM UK Equity Income fund for whom it is their largest overweight position. The shares have seen a steady rise since late September and were up 0.8% on the day to 483p. 

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