26th March 2012
2011 was a year of extremes when it came to fund sales and the annual statistics from the Investment Management Association evidenced just how polar opposite different investors can be at times while perhaps trying to achieve the same outcome.
Firstly, tracker funds continued to rise in popularity. They saw the highest net retail sales on record accounting for 8% of total equity sales and the highest level since 2003. They've had a lot of good press recently as fund charges have come under the spotlight and volatile markets have taken their toll on some active managers but these can't be issues for everyone as the next statistic reveals.
On a gross retail sales basis, funds of funds sales accounted for £1 in every £9 invested in funds in 2011. They also saw their highest ever level of total funds under management and now represent 11% of the total figure. And these funds are completely the opposite of trackers – generally a lot more expensive and they rely on two levels of active management; that of picking the stocks in the underlying funds and then another manager picking the funds and the make up of the overall portfolio.
So what is the common driver of success for these two types of investment?
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