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UK Equity sector remains popular in Q4 despite market volatility

13/01/2015

Latest investment fund flows into the Old Mutual Wealth platform shows UK Equity, Multi-asset and Property sectors continue to dominate net sales. The UK Equity sector continues to shine and is the top selling sector, accounting for 27.4% of net sales in Q4, despite a turbulent quarter in the equity markets.

Investment trends Q4

Property:

Net sales into Property fell from 28.5% in Q3, where it was the top selling sector, to 21.3% in Q4, falling to position number 3. Despite this drop, Property fund flows continue to be well above their longer term average. Some of this drop could be as a result of portfolios now reaching the limits of what they can hold in property according to their asset allocation.

Fixed Interest funds continue to experience low levels of flows, although sales did rise slightly in Q4 they still only account for 4.5% of net sales. The shift during 2014 away from UK Fixed Interest towards property was the result of many factors, but in the main was evidence of investors hunting yield, given low rates on gilts and AAA corporates. Additionally this shift demonstrates the increasing awareness of investors of the unsustainability of the low yields currently offered by fixed interest investments.

Europe:

Europe has experienced a significant fall in net sales, dropping from 9.1% in Q3 to just 1.7% in Q4. The fall in net sales in the European sector is largely a reflection of the continuing uncertainty around the Eurozone.

European equities have laboured under the pressure of slow growth and potential near term deflation. Economic sanctions with Russia have detracted from eastern trade and attempted economic stimulation by the European Central Bank have proved ineffectual.

Top selling funds:

The top 10 selling funds on the platform, based on net sales during Q4:

CF Woodford Equity Income
Henderson UK Property OEIC
Royal London Corporate Bond
Neptune UK Mid Cap
Old Mutual UK Alpha
Artemis High Income
Fundsmith Equity
M+G Feeder of Property Port
Old Mutual Monthly Income Bond
Old Mutual Artemis Income

Dean Bowden

Dean Bowden, head of investment solutions, Old Mutual Wealth, comments:

“Despite UK equity markets being extremely volatile and dipping significantly in October and December, flows in to UK equities have continued to be strong. However, diversification is clearly still important to investors given the flows into Property and Multi-asset funds, both of which aid in diversifying a portfolio and spreading risk.

“During 2015 we are likely to see demand for Property funds stabilise at slightly above their longer term average levels, as sentiment towards UK Fixed Interest funds continues to waiver and investors seek income.

“In terms of other global markets, expectations for 2015 vary markedly between regions. Performance in Europe during 2015 will largely depend on the action and success of the efforts from the central bank to stimulate economic activity. The US market is likely to continue to do well despite reasonably high historic valuations. The US continues to attract investor interest given its positive outlook for growth coupled with stable labour wage rises and falling energy costs. Far East & Emerging market economies dependant on imported raw materials and energy are expected to see an uplift in both economic activity and profitability in 2015. However a number of these regional markets have already seen equity values rise in late 2014 partially reflecting the improving near term outlook.”

For more information please contact

Sophie LentonOld Mutual Wealth02380 916 77007834 499 558
Tim Skelton-SmithOld Mutual Wealth02380 916 998 078 2414 5176

Notes to editors:

Quilter is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at www.oldmutualplc.com.

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