Funds under management at the end of December 2010 were £579bn, an increase of 20% from a year earlier. This was the highest ever recorded figure, the IMA says. Over the past five years the industry has grown by 67% in nominal asset terms and by 122% over the past decade.
According to the trade association, market movements were responsible for 48% of the increase in annual funds under management over 2010, while new money accounted for the remaining 52%.
In its annual asset management survey the trade body notes last year saw retail investors increase diversification with Global Bonds, Global, and Global Emerging Markets sectors all reporting their highest level of net retail sales.
While equity funds still accounted for the largest proportion of assets under management across the industry, at 57%, bond funds witnessed impressive inflows last year. Bond funds experienced £7.1bn in net retail sales in 2010 with investors opting for portfolios with broad remits. Sales of corporate bond funds eased off from the highs of 2009 while net retail inflows into Strategic Bond funds rose, up 48% over the previous year.
Outside of the dominance of bond and equity portfolios, the IMA reports the market share of property funds increased year-on-year to 2.1% (from 1.9%), but is still down from over 3% at their peak in 2006.
UK-authorised absolute return funds continued to increase in significance, up from 1.7% in 2009 to 2.6% of total funds under management in 2010, the IMA reports.
Fund sales are also becoming more concentrated, with the top 100 funds taking more than half of total gross sales in 2010 compared to 47% five years ago. In addition, although the top 10 firms’ share of the funds market held steady last year, the share of the next 10 firms is increasing at the expense of the smallest firms, the IMA says.
