The data is in line with asset managers Q1 trading updates. Schroders reported its AUM had fallen from £435.7bn to £426.1bn in the first three months of the year, while Jupiter and Brooks Macdonald were among the others in the asset and wealth management industry that saw assets fall.
IA fund market specialist Alastair Wainwright noted concerns about a trade war between the US and some of its closest trading partners, including China and the EU, led to negative returns in equity markets and some bond markets.
Net retail sales across the sector were £1.5bn with AUM across the sector now sitting at £1.2trn. While the figure is down month-on-month, it is still up from £1.1trn AUM recorded in March 2017.
The IA North America sector was the worst performing in March (-5.1%), followed by Technology and Telecommunications (-5.0%) and the China/Greater China sector (-4.4%).
UK Gilts sector was the best performing returning 2.3%.
“Fiscal year end investment activity pushed longer dated government bond yields down,” Wainwright said.
UK equity funds remained unloved during the period with net retail outflows of £466m, although the figures pre-date a bumper week of UK equity ETF inflows in April that hinted at sentiment changing towards the asset class. UK All Companies was the worst-selling IA sector with £432m outflows.
Mixed asset was the best-selling asset class gaining £890m, while fixed income funds suffered outflows totaling £309m.
“Investors stopped allocating to the Sterling Strategic Bond sector,” Wainwright said.
Last year the sector attracted £7.5bn of inflows despite rising interest rates and the 30-year bond bull market appearing to be nearing its end. The sector’s inflows helped make fixed income the top-selling asset class in 2017.
Flattering Isa figures
Isa sales turned positive for the first time in seven months in March at £363m, with an additional £256m in the first five days of April.
Architas investment director Adrian Lowcock said Isa season flattered the latest monthly flows figures.
Lowcock said: “One month doesn’t reverse the recent trend of money flowing out of ISAs as nervous investors have taken profits following a strong run in global equity markets. In addition investors have been cashing in their unwrapped investments, possibly recycling this money to fund their ISA investments.”
