Demand for equity funds in decline – 3077

22nd November 2010

According to analysis by Henderson Global Investors equity sales accounted for 62% of total gross sales in 2005. But by the end of September 2010, that figure had eased to just 44%.

Henderson says the allocation to regions within equity is also changing, with investors are gradually expanding their investment preferences to include more exotic regions than the UK.

It notes that UK equities accounted for 54% of gross equity sales in 2005 while in 2010 only 43% of gross equity sales were into UK equity. Asian, global and global emerging market equities have taken up this slack. Indeed, global equities have seen positive net sales in every year since 2005 and have been the top selling equity region.

Global equity net sales of over £7.2bn since 2005 dominate the total equity net sales of £3.4bn over the same period.

This Investors Chronicle article focuses on the increasingly sophisticated emerging market offerings fund managers have developed.  

Henderson urges fund managers to be aware of these developments to ensure their fund line-ups stay competitive. It cites as an example the recent spate of launches of global equity income funds. These are aimed at satisfying demand for global exposure while also appreciating that many investors are eager for income when domestic interest rates remain at historic lows.

This Investment Week article highlights the growing popularity of global oriented funds, noting that thee problems of domestic investing brought on by the credit crunch have been a major driver for their growth.

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