Fund management a tale of two halves in 2011
The fund management industry endured ups and downs in 2011, reflecting fluctuations in the economy as a whole.
- (1888PressRelease) February 09, 2012 - According to data from the Investment Management Association, net retail sales in the fund sector for the whole of 2011 reached £18bn.
This was way down on the record sales levels enjoyed in 2009 and 2010, which yielded £29.8bn and £29.3bn in sales respectively.
However, 2009 and 2010 were anomalies, with the average for the previous ten years reaching just £13.8bn. As for 2011, this was very much a year of two halves.
The first six months saw further strong sales, the IMA suggests, continuing the trend started back in 2009 with £13.6bn changing hands. However, as the eurozone crisis deepened, confidence waned and activity in the fund management sector slowed down, with just £4.4bn in sales for the second half of the year.
Richard Saunders, Chief Executive of the IMA, said that the uncertainty surrounding the health and future of the eurozone also changed the landscape of the buying market.
"This caution was reflected also in asset choices, with some outflow from equity funds in the second half, and money going instead into bond funds and balanced funds," he explained.
Reduced sales activity was not the only knock-on impact of the last 12 months, however.
"Another feature of 2011 was the continued growth in the market share of funds domiciled outside the UK," Mr Saunders added.
"They saw their largest inflows on record, and market share at the end of the year was 5.4% compared with 3.7% only four years previously."
According to the National Institute of Economic and Social Research, the final quarter of 2011 saw the UK achieve negative economic growth of 0.2%.
Furthermore, it says there is only a one in four chance of avoiding the same figures for the first three months of 2012, constituting a technical recession for the UK.
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