Record business for tracker funds

Tracker funds recorded their highest quarterly net retail sales on record in the third quarter, according to the Investment Management Association.

Trackers took £633m in net retail sales, 24 per cent above the quarterly average of £511m for the past 12 months and 53 per cent more than the £413m net retail sales in the third quarter last year.
In the year to date, net retail sales of tracker funds have reached £1.7bn, the highest on record for the period.

The funds’ share of total gross retail sales was 6.6 per cent in the third quarter, the highest quarterly share of gross retail sales since the first quarter in 2002.

Of the 81 tracker funds, 41 track the main UK indices, mainly the FTSE 100 and FTSE All Share indices. The remainder track a wide spread of other equity indices, including European, global, Asia Pacific and the US.

Tracker funds under management amounted to £36.2bn at the end of September, accounting for 6.6 per cent of total funds under management. This is a fall of 11 per cent from £40.5bn in the second quarter of the year.

Bloomsbury Financial Planning partner Jason Butler says: “I am not surprised that trackers have recorded these sales, as investors are becoming more aware of cost at the moment and active asset allocators who say they can time markets are using index funds and passive funds more as building blocks.”