View more on these topics

Special effects

If you had read the headlines about the investment fund industry’s sales for December, you would be forgiven for thinking that everything was doom and gloom and that investors were selling up hand over fist. Not so.

Alongside the figures for December, we published the annual 2007 numbers. Taking the year as a whole, we saw net sales of almost 9.5bn. Of course, this was not as good as the 15bn in 2006 but it outstripped, often significantly, each of the preceding years going right back to 2000.

If we had not seen the unusual outflows of the last two months of the year, we could well have been looking at sales of over 11bn last year. Of course, we cannot ignore the events of the last few months of the year, more about which later.

Funds being managed on behalf of retail investors continued to rise and, despite the market turmoil of 2007, reached 468bn, a 14 per cent increase on December 2006.

As would be expected, equities continued to play a dominant role although the latter half of the year saw a slight drop-off from the rally of 2006, with money market and balanced funds coming out as net winners. Bonds took a big hit after dropp-ing from 3.6bn net sales in 2006 to only 167m last year. Overall, the best-selling sectors for 2007 were specialist, as a result of the boom in property sales, cautious managed and equity income.

Of course the big story of 2007 was property funds, which kept the specialist sector as the best-selling sector for nine of the first 10 months of the year.

They reached their peak in the first quarter and were followed by a solid second quarter.

Sales then slowed down in July and the credit crunch put paid to their popularity, with investors becoming net sellers in the last two months of the year and cautious managed funds leaping in popularity, perhaps reflecting advisers’ and investors’ nervousness in the markets as they re-evaluated their portfolios.

Last year also saw the first time we began to publish figures for overseas domiciled funds sold to UK investors. Our current data set comprises 620 funds from 24 companies and amounts to 18bn in funds under management. While we do not have enough of a history yet to come to any conclusions, it is clear that UK investors have a growing appetite for overseas funds and that this is an area which looks set to grow in the future.

All in all, 2007 was a good year, with the credit crunch responsible for upsetting what was set to be a very good year. The big question, of course, is where is the industry going to go from here? With markets still unsettled and property funds losing their attraction, the future is clearly uncertain.

Whether or not investors will hold their nerves and bide by the mantra that investing is a long-term game remains to be seen.

Mona Patel is head of communications at the IMA


LibDems demanding Omo as default for personal accounts

The Liberal Democrats are calling for the open market option for annuities to be made the default for personal accounts.Shadow Work and Pensions Secretary Danny Alexander has tabled an amendment to the Pensions Bill after research showing that the cost of not using the Omo could be the same as increasing the annual management charge […]

Fidelity FundsNetwork urges advisers to review Sipp charges

Fidelity FundsNetwork is urging advisers to review existing pension plans to see if they could find their client a cheaper option.A poll by FundsNetwork found that 86 per cent of advisers thought cost was the most important factor to consider when choosing a self-invested personal pension. Nearly half of Sipp investors – 46 per cent […]

PFS link-up in run-off indemnity deal

PYV and the Personal Finance Society are offering the option of run-off PI cover for firms that cease trading.PYV says advisers who have been insured with an approved insurer for two or more years can extend their PI cover if they stop trading.Advisers who have renewed with their current insurer at least once will be […]

Protection business buoyant after software deals

Direct Life & Pensions’ new business figures for January leapt by 64 per cent from the same time last year.It received 7,100 proposals compared with 4,300 in January 2007.The firm signed deals with several companies in 2007 to provide its Intelligent Protection software, including Network Data, Aberdein Considine, Motley Fool and Dunfermline Building Society.The software […]

Jelf flexible benefits

In Focus: How to choose a flexible benefits provider — seven top tips

Jelf Employee Benefits looks at some of the key considerations employers should think about when reviewing and choosing a flexible benefits provider. Choosing the right benefits for your employees is one thing but delivering a successful employee benefits strategy is about understanding the complete picture and delivering it in a personalised way so that it resonates with each and every individual in your business. 


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm