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Funds under management in fund of funds down 12 per cent on 2007

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Funds under management in fund of funds reached GBP30.3bn at the end of quarter four 2008, down four per cent on the previous quarter and 12 per cent down on the same quarter in 2007, a

Funds under management in fund of funds reached GBP30.3bn at the end of quarter four 2008, down four per cent on the previous quarter and 12 per cent down on the same quarter in 2007, according to the Investment Management Association.

Balanced funds accounted for the majority of funds under management, representing 65 per cent of assets, followed by 18 per cent in equity funds.

Fund of funds total net sales of GBP304.0m in quarter four 2008 included GBP111.5m net retail sales, up from the GBP81.0m net retail sales seen in quarter three 2008 but lower than the GBP348.1m net retail sales seen in the same quarter the previous year. 

GBP258.0m of net inflows went into internally invested funds and GBP46.0m went into externally invested funds.  The most popular sector in quarter four 2008 was balanced managed, accounting for net inflows of GBP116.7m.

For the whole of 2008, total net retail sales for fund of funds were GBP934.3m, down from the GBP1.6bn in 2007. The most popular sector for the year overall was cautious managed, accounting for GBP782.0bn of total net sales.  

Funds under management in tracker funds in quarter four 2008 were GBP19.8bn, down five per cent on quarter three 2008’s GBP20.9bn, and 27 per cent lower than quarter four 2007. 

Retail sales saw a net inflow of GBP280.2m in quarter four 2008, compared with an outflow of GBP33.0m in quarter three 2008. The same quarter the previous year saw a net outflow of GBP59.6m. The most popular distribution channel for gross retail tracker sales was intermediary accounting for 59 per cent of sales.

Net retail sales for tracker funds for the whole of 2008 saw an inflow of GBP308.3m, compared to outflows of GBP108.9m in 2007. 

Meanwhile, ethical funds under management in quarter four 2008 were GBP4.4bn, down seven per cent on the previous quarter, and 25 per cent down on the same quarter in 2007. 

Retail sales saw a net inflow in quarter four 2008 of GBP54.8m, higher than the inflow of GBP20.5m seen in the previous quarter. The same quarter the previous year saw an inflow of GBP99.7m.

Total net retail sales for ethical funds for the whole of 2008 were of GBP152.4m. In 2007 net retail sales were GBP472.8m.

Richard Saunders, chief executive at the IMA, says: "Tracker funds saw their highest quarterly retail sales since 2002, and made a significant contribution to the net inflows to equity funds in the period. Sales of ethical funds continued at a steady rate, but they continue to be a relatively small proportion of the whole."

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