On average nearly 30% of sales each month went into multi-asset funds last year, as the trend for outsourcing investments post RDR continues. This was followed by UK equity funds that had on average 18% of monthly sales. The popularity of UK equities steadily increased over the year following a decline in sales in February. This is likely to be a response to the improving UK market conditions; their popularity peaked in November, when they overtook multi-asset funds as the top selling asset class.
In contrast, UK fixed interest funds witnessed a slump in attractiveness this year. However, there was a surge in sales in May as people searched for income through sterling bonds. On average they accounted for 8% of sales each month.
Cash was the least popular asset class over the year and averaged -0.9% of sales. This is likely to be a result of the boosted investor confidence and the consequent drive for strong returns.
Alistair Campbell, head of investment marketing at Skandia comments:
“2013 was quite a year in the investment industry. We saw the world markets improve and in particular investor confidence in the UK economy grow. The FTSE 100 delivered the best returns it had seen in years and as a result investment sentiment shifted towards higher risk asset classes such as equities and the global specialist sector. This boosted confidence was highly evident at the end of the year when the ‘great rotation’ out of fixed interest and into equities seemed to materialise.
“It is unsurprising that multi-asset funds have performed so strongly over the year. As a result of RDR and the move to adviser charging, the focus on value for money is more prominent than ever and consequently advisers are looking to a wider range of solutions to cater for the varying investment preferences of their clients’. Packaged investment solutions such as multi-asset funds offer a great alternative for customers who don’t want a bespoke portfolio of funds built by their adviser, but still want to access the top funds and fund managers.”