At the end of July, the funds under management for tracker fund stood at £83bn. Their overall share of industry funds under management was 10.2%, compared with 9.4% in July 2013.
“Passive funds have also seen record inflows as investors focus on costs and performance. We have noticed this too with investor interest in our new core tracker range of preferred passive funds,” Laith Khalaf, senior analyst at Hargreaves Lansdown commented.
“We expect the UK market to gradually polarise into low cost passive funds on one hand, and active managers with a proven track record on the other.”
Net retail sales for July stood at £1.9bn, a decrease of 21% year on year, compared to £2.4n in July 2013.
Asset class
UK equity income continued to be the best-selling asset class in July, with net retail sales pushing £1bn. This is the sixteenth consecutive month that equity ranked as top-selling asset class.
“Last month we saw the Woodford effect propel UK Equity Income to the top of the sales charts. We suspect this month we are seeing a ripple of that effect, as coupon-clipping investors in the Invesco Perpetual High Income fund stayed for the ex-dividend date on 1st July, then switched across to Woodfords’ new fund,” Khalaf said.
He added: “Indeed it is notable that the worst selling sector in July was UK All Companies, the sector in which the Invesco Perpetual High Income fund now sits.”
The UK All Companies was the worst-selling IMA sector for the second consecutive month. It recorded a net retail outflow of £230m.
In second place for the month was mixed asset, which saw net retails sales of £390m. Meanwhile property came third, with net retail sales amounting to £304m.
Farther down, the Sterling Strategic Bond asset class recorded net retail sales of £274m, the Mixed Investment 20-60% Shares asset class saw net retail sales of £238m, and the Asia Pacific Excluding Japan recorded net retail sales of £198m.
Regional
The UK was the best-selling region for equity funds with net retail sales totalling £678m. The UK Equity Income sector bolstered sales in the region with net retail sales of £1bn.
Meanwhile Asia equity funds were the second best-selling. Here net retail sales amounted to £203m, the highest for these funds since January 2013.
Next in line were Global and Japan, which recorded net retail of £163m and £80m respectively.
Near the bottom of the list, both North American and European equity funds saw outflows of £30m and £48m respectively.
