Tracker fund popularity surges

According to the IMA net retail inflows into tracker funds trebled last year over 2009s figures.


In last week’s report, the IMA highlighted that tracker funds have under gone a resurgence of interest from investors, with £1.5bn of retail inflows last year. Together with institutional investors and rising markets, assets under management in this area ended the year at £38.3bn, 33% higher than in 2009.

It doesn’t appear as if 2011 is seeing any slackening in passive interest. In May the IMA reported tracker funds witnessed their highest net retail sales on record over the first quarter.  With £824m in retail net inflows, the first three months of 2011 far outpaced the £130m of inflows in the opening quarter of 2010.

While the vast majority of investors still favour equity passive funds over fixed interest, they have been increasingly moving away from the UK market. The IMA says the proportion invested in non-UK equity tracker funds has risen from 19% to 30% over the past five years.

Tracker funds now represent just under 7% of total industry funds under management, according to the trade association.