After a tumultuous year, defined by volatile markets and low investor confidence, it was the passive funds that dominated the field, according to the latest Pridham Report.
New business among the top four managers was underpinned by sales of tracker funds, with Blackrock, Legal & General Investment Management (LGIM), Fidelity, and HSBC Asset Management all reporting an increase in gross sales of passive funds compared to 2021.
Blackrock led the field in gross sales for the ninth consecutive year, surpassing the £28bn that it attracted during 2021, while LGIM and Fidelity placed second and third respectively.
Top 10 managers by retail sales, 2022
| Manager | Gross sales (£m) | Manager | Net sales (£m) | |
|---|---|---|---|---|
| 1 | Blackrock | £28,621.00 | Fidelity | £3,636.30 |
| 2 | Legal and General IM | £16,342.20 | Legal and General IM | £3,053.60 |
| 3 | Fidelity | £15,618.60 | HSBC AM | £2,723.90 |
| 4 | HSBC AM | £10,705.40 | Royal London AM | £2,013.00 |
| 5 | Royal London AM | £9,791.00 | Blackrock | £1,906.90 |
| 6 | JP Morgan AM | £7,220.40 | Rathbones | £291.90 |
| 7 | Liontrust | £6,568.00 | Edentree | £248.30 |
| 8 | Schroders | £6,158.60 | Hargreaves Lansdown | £122.00 |
| 9 | Jupiter | £5,691.30 | Orbis Investments | £79.30 |
| 10 | Baillie Gifford | £5,338.00 | Aegon AM | £38.90 |
Anna Pridham, co-editor of the Pridham Report, said: “Gross sales are the true measure of how much new money asset management groups are attracting and, in uncertain times, having a strong brand and a compelling product offering is often what sets the successful managers apart. However, many of these groups have mature business on their books so they also suffer from natural outflows, even at the best of times.”
But 2022 was unusually difficult for the industry, with UK investors pulling a staggering £25.7bn from funds during the year, according to data published recently by the Investment Association.
Of the top 10 managers for net retail sales in 2021, only LGIM, Fidelity, and Royal London AM managed to surpass their 2022 numbers; with Baillie Gifford, Liontrust, AllianzGI, and Blackrock all falling out of the list.
Much of Royal London’s success was built on the popularity of its sustainable fund range, but the group also also saw significant demand from bond investors for its short-dated fixed-income and money market funds.
The report added: “Despite equities being in net outflow across the industry last year, managers with the right products were able to attract new assets. JP Morgan AM benefitted from retail demand for US equities and its top seller in 2022 was the JPM US Equity Income Fund. Liontrust, Schroders, Jupiter and Baillie Gifford all had strong sales of equity funds.”
Top 10 managers by retail sales, Q4 2022
| Manager | Gross sales (£m) | Manager | Net sales (£m) | |
|---|---|---|---|---|
| 1 | Blackrock | £6,823.60 | Legal and General IM | £1,474.00 |
| 2 | Legal and General IM | £4,510.70 | Blackrock | £1,314.40 |
| 3 | Fidelity | £3,217.50 | Royal London AM | £1,260.00 |
| 4 | Royal London AM | £3,176.00 | HSBC AM | £696.40 |
| 5 | HSBC AM | £2,276.40 | Fidelity | £510.10 |
| 6 | JP Morgan AM | £1,734.00 | Hargreaves Lansdown | £161.00 |
| 7 | Liontrust | £1,515.00 | Rathbones | £144.80 |
| 8 | M&G | £1,287.20 | Orbis Investments | £52.20 |
| 9 | Schroders | £1,242.60 | M&G | £49.90 |
| 10 | Jupiter | £1,183.60 | Artemis | £41.10 |
Bond funds recovered to above average levels by the fourth quarter, despite being bit by significant outflows at the start of the year. The bond vigilantes at M&G, as the Pridham Report described them, benefitted from this pivot towards the asset class, helping the asset manager move into the top 10 tables for both gross and net sales in the fourth quarter.
Fidelity, HSBC AM, Schroders, and Jupiter all recorded lower gross sales than in Q3 2022, with the latter sliding down the table from sixth to tenth. However, the average figures for net sales were much improved on Q3, and in the top 10 for Q4 2022, only Fidelity posted lower net sales than in Q3 2022.
AllianzGI, Edentree, and Alliance Bernstein dropped out of the top 10 for net retail sales in the quarter, being replaced by Orbis, M&G, and Artemis.
The report concluded by pointing out that inflation will continue to be a defining feature of global markets in 2023, and that investors ought to expect further volatility. “However, there is potentially more opportunity for long-term savers than we have seen in many years as yields and valuations become more attractive.”
