UK Commodity Fund Sales Hit New Record
Thursday, January 13, 2011

Fund statistics published by the UK Investment Management Association (IMA) show that November 2010 was a record month for inflows into commodity funds as investors sought greater diversification.

The IMA's monthly statistics bulletin for November, published January 10, revealed that commodity fund net retail sales reached GBP208m (USD325.7m), the highest on record.

"Investors continue to seek diversification," Richard Saunders, Chief Executive at the IMA. "In November there was continued appetite for funds with a global scope, and commodity funds also experienced their highest ever inflows."

However, Saunders observed that all the main asset classes have been popular in 2010, "during which investors have consistently added to their portfolios.”

November saw net retail sales of UK-domiciled funds of GBP1.4bn, below the monthly average of GBP2.0bn for the past 12 months. Year to date net retail sales totaled GBP21.4bn, compared with GBP23.7bn in January to November 2009. However, these figures should be seen in the context of a record year for fund sales in 2009 at GBP25.9bn.

Sales of tax-advantaged Individual Savings Accounts (ISAs) totalled GBP108m, below the monthly average for the past 12 months of GBP361m. However, year to date net ISA sales were GBP3.8bn, the highest level since 2001.

Funds under management in November totalled GBP554.9bn, down from October’s peak value of GBP556.9bn, due to a decline in market values. (The FTSE 100 closed at 5,528 at the end of November 2010, 2.6% down on the end of October).

Funds under management for ISAs were GBP100.4bn in November just behind October’s record of GBP101.7bn.

The leading asset class was Equities with net retail sales of GBP685m in November, up from GBP475m the previous month.

Net retail sales of bond funds totalled GBP160m in November, well down on the average of GBP588m over the past 12 months.

For the second month running, the Global Emerging Markets sector was the best selling IMA Sector in November, with net retail sales of GBP337m, the highest month on record.

The Specialist sector (which includes commodity funds) was the second most popular IMA Sector in November with GBP262m in net retail sales, over double the monthly average of GBP117m for the past 12 months.

Global Bonds was the third most popular IMA Sector in November, with net retail sales at GBP223m. The Global Bonds sector has been in the top five selling IMA sectors for nine of the last 12 months.

The lowest selling sector in November was the Europe excluding UK sector, which saw a net outflow of GBP230m.

Gross retail sales through Fund Platforms totalled GBP3.4bn, compared with the year to date average of GBP3.0bn. Platforms’ market share was 36% of total gross sales in November.

Gross retail sales for 'Other Intermediaries' - which includes Wealth Managers and Stockbrokers - totalled GBP5.1bn for November. Other Intermediaries’ market share was 55% of total sales.

Direct channels’ gross retail sales totalled GBP823m in November, representing 9% of total sales. Direct Channels include sales forces and tied agents, private clients and other direct to investor sales without intermediation.

November saw funds under management with Fund Platforms at GBP100.3bn, equal to October’s record level for Fund Platforms since figures were first collected in January 2008.

Sales across all products through Fund Platforms in November were higher than in October. Unwrapped products had the greatest market share in November at 37%.

Institutional funds saw net sales of GBP951m in November 2010. High net sales in previous months were largely due to insurance fund assets being transferred into unit trust/Open-Ended Investment Company structures.

Overseas domiciled funds saw net retail sales of GBP201m in November 2010, almost double that of the previous month, and more than double the average of GBP87.6m for the past 12 months. Funds under management of GBP25.7bn were the highest on record.