Record Asian equity outflows as UK equity income stays strong – IA

Asian equity funds suffered unprecedented outflows as net retail sales across the board hit their lowest ebb since January, according to the Investment Association’s August statistics.

Record Asian equity outflows as UK equity income stays strong - IA
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Published 30 September, the report revealed that Asian equity vehicles saw the largest volume of fund outflows on record at £314m net, while the £125m net outflows from Global mandates represented the highest figure since November 2011.

Furthermore, net retail sales across the board stuttered, dropping to £690m for the month – a 77% decrease on the £3bn recorded in July.

However, equity funds remained popular with investors for the fourth consecutive month, with net retail sales totalling £503m.

Property took second place with £184m net; however, this represented a 37% slide on the £294m net sales the previous month, and the lowest monthly total for two years.

At £55m net, mixed asset mandates registered their lowest monthly figure since January 2009, down 87% month-on-month, while fixed income saw its biggest net outflow since June 2013 with £333m-worth of redemptions.  

UK equity was by far the most-bought sector in regional terms, hitting £719m net in August having averaged net outflows of £13m during the past 12 months. Europe and Japan were the next best-selling regional equity markets, registering net figures of £146m and £102m respectively.

On the IA sector side, UK Equity Income ranked top for the eighth time in 12 months with net retail sales hitting £520m, followed by Targeted Absolute Return’s £243m and Europe Excluding UK’s £220m.

Property and UK All Companies completed the top five, on net sales of £184m and £173m respectively, while at the other end of the spectrum, Asia Pacific Excluding Japan suffered the biggest retail outflows at £218m net.

“Market volatility may have made investors more cautious in August, reinforcing a tendency for sales to dip over the summer period,” said Daniel Godrey, IA CEO.

“In terms of asset allocation, investors appear to be sticking with equities – particularly equity income funds – whilst withdrawing money from bonds, perhaps in expectation of an interest rate rise.”

Region

Net Retail Sales
in August 2015

Average net retail sales
for previous 12 months

UK  

£719 million

-£13 million

Europe

£146 million

£162 million

Japan

£102 million

£63 million

North America  

-£26 million

£12 million

Global  

-£125 million

£270 million

Asia

-£314 million

-£5 million

 

Investment Association Sector

Ranking in 
   August 2015

Net retail sales
in August 2015

Ranking in
July 2015

Net retail sales
in July 2015

Asset Class

UK Equity Income 

1

£520 million

1

£610 million

Equity

Targeted Absolute Return 

2

£243 million

3

£333 million

Other

Europe Excluding UK

3

£220 million

2

£395 million

Equity

Property

4

£184 million

5

£294 million

  Property  

UK All Companies

5

£173 million

4

£300 million

Equity  

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