Revealed: The best-selling fund groups of 2011

M&G tops both retail sales lists as investors seek out bond funds, while BlackRock’s active and passive vehicles also prove popular.

Investors’ move into bond funds in the final quarter of 2011 helped M&G retain its position as the UK’s top seller of funds to retail investors, according to the latest Fundscape Pridham Report.

The quarterly report revealed M&G was 2011’s largest selling fund group on both a gross and a net basis, and one of a few to see net retail sales increase in the fourth quarter.

Many of the other 2011 winners benefited from their ability to leverage off wider distribution networks: Santander, HSBC and Lloyds Banking Group’s Scottish Widows and SWIP all feature in the top ten, as well as insurer-owned Standard Life Investments and AXA IM.

BlackRock, BNY Mellon and Threadneedle make up the rest of the net retail sales top ten, while Invesco Perpetual, Jupiter, Fidelity, Henderson, Schroders and Legal & General all feature among the top ten by gross sales.

M&G saw net retail sales of £1.2bn in the fourth quarter; over four times as much as the £278m garnered by second-place BlackRock.

Inflows were driven by investors’ desire to switch back into bond funds with almost two thirds of M&G’s gross sales in the final quarter going into fixed income
products.

“Thanks to its strong performance record, M&G continues to be the default option for investors seeking the safer haven of fixed income,” said Fundscape director Helen Pridham.

Similarly, the strong relative performance of Kames Capital in Q4 may also be attributable to  the attractions of its fixed income business: the group took in £159.5m over the quarter, the fifth largest amount.

BlackRock’s success in 2011 came via both active and passive equity funds. The US asset manager is seeing a growing demand for passive strategies from discretionaries, who are increasingly using passives as core holdings, according to the report.

The authors of the study also warned of a difficult year ahead as advisers prepare to hand over investment management responsibilities in the run-up to RDR.
“There is likely to be an increased level of turnover in the funds industry as many advisers hand over the management of client investments to discretionary fund managers or multi-manager and multi-asset funds,” Pridham said.