Responsible investment funds remain on track for a record shattering year as investors continue flocking to the asset class with no signs of the Covid crisis letting up.
A record £7.1bn has flown into responsible funds so far this year, according to statistics from the Investment Association, nearly quadruple the £1.9bn funds took in during the first three quarters in 2019.
In September alone, responsible funds raked in £975m, building on the £897m attracted during August.
“In a year clouded by uncertainty, responsible investment funds are a beacon for how savers can put their money to work to support positive change globally, and our industry can be proud that these funds are reaching new heights of popularity,” said IA chief executive Chris Cummings (pictured).
UK retail industry rebound continues in September
As lockdown measures eased over the summer months, UK savers ploughed £5.4bn into retail funds in Q3, more than three times the net retail sales for Q3 2019 of £1.2bn. In September net retail sales hit £1.6bn, down slightly from £1.8bn in August.
Tracker funds also had a strong showing over the quarter, raking in £4bn from retail investors.
Cummings described the positive flows as a “heartening” rebound for the UK retail industry which haemorrhaged £9.7bn in March alone as investors panicked during the initial onset of the coronavirus crisis.
“It remains to be seen just how significantly new Covid-19 restrictions and lockdowns imposed across the UK and internationally will affect investor behaviour as we head towards the end of 2020,” Cummings said.
Absolute return funds return to outflows
Bond funds continued to dominate net inflows in September, hoovering up £1.2bn in net retail sales, down slightly from the £1.4bn brought in during August.
Global bonds was the best-selling IA sector in September with net inflows of £937m, nearly twice as high as the next top-seller Global equities which recorded £474m in net sales.
UK Gilt funds rounded out the top five best sellers, attracting £94m during the month.
The IA Targeted Absolute Return sector was September’s worst seller with investors pulling £266m from the asset class. Despite a brief respite in August in which it took in £74m in net inflows, the sector has been net redemptions for the rest of 2020, losing £3.4bn in total.
UK equity funds also remained deeply unloved in September recording their fourth month of consecutive outflows. Investors yanked £321m from UK funds over the period, though redemptions more than halved from the £748m withdrawn in August.
See also: Covid and Brexit batter UK equity fund flows for fifth consecutive month
Japan was the second worst selling region after the UK with net outflows of £145m.
