Funds of funds have posted their highest ever level of sales, according to industry data, as tracker funds and ethical funds also showed increase in assets under management.
Publishing data for the three sectors on 10 November, the Investment Management Association said investors continued to show an appetite for funds of funds – where a fund has holdings in other managed funds – with a 31 per cent increase in funds under management.
The total being managed in funds of funds is now £52billion, with tracker funds increasing by 15 per cent to £30.4million and ethical funds seeing a 12 per cent increase in the money they manage during the third quarter of 2010 compared to 2009.
Chief executive of the IMA, Richard Saunders, said: “Investors continue to show an appetite for funds of funds, adding a record £5.1billion so far this year. At the end of September, funds of funds accounted for nearly 10 per cent of total funds under management, also a record high.
“Tracker funds are also increasingly popular, with year to date net retail sales of £599million, the highest level since 2002.”
Tracker funds, also referred to as passive funds, aim to track particular indices.
With £6.1billion under management at the end of September, Saunders said ethical funds formed a modest proportion of total sales but recorded £74million in net retail sales for the third quarter of 2010.
At a parliamentary reception for National Ethical Investment Week on 9 November, the UK Sustainable Investment Forum (UKSIF) called on the government to introduce a Green ISA allowance in next year’s Budget.
Research carried out by YouGov showed 27 per cent of adults would invest in a Green ISA, while over half of existing investors would consider investing in renewable energy to help the sector receive greater funding.
UKSIF chief executive Penny Shepherd said over the next 15 years the gap in energy investment could be up to £400billion and more should be done to tap into consumer interest in green energy to help fill that gap.
Big increase in funds under management at Schroders
On 9 November, the asset manager Schroders announced net inflows to its business of £21.5billion in the nine months to 30 September 2010, up from £8.7billion in the same period in 2009. The firm said 79 per cent of the inflows were from clients outside of the UK.
This puts the total funds under management at a record £181.5billion and boosted the company's share price during trading on 9 November.
© Fair Investment Company Ltd