UK fixed interest is May’s best selling sector on Skandia platform

10th June 2013

Fund supermarket Skandia says income generating funds continue to dominate the top 10 selling fund list, and the Towers Watson UK Fixed Interest sector has regained its position as the best selling sector.

The Fixed Interest sector has recovered from its low point earlier this year and now accounts for nearly a quarter of all net sales onto the Skandia platform. This is closely followed by the Multi-asset sector, which has slipped to second place with 23% of net sales. Global specialist and UK equity sectors have remained fairly constant and continue to be key investment sectors.

 Net sales into the top four Towers Watson sectors:

Towers Watson Sectors

May net sales

UK Fixed Interest

24.8%

Managed

23.1%

Global Specialist

17.0%

UK Equity

12.7%

International Fixed Interest

9.7%

North American

8.7%

Property

4.7%

Far East

2.7%

Japan

2.6%

European

0.5%

Emerging Markets

-2.2%

Cash/Money

-4.3%

 

In International equities, North American equities dominate, whilst Emerging Markets have seen net outflows. This reflects the relative out-performance of US equity markets relative to emerging markets over the month by nearly 5%, and nearly 20% year to date.

Top 10 selling funds on the Skandia platform, based on net sales in May

Fidelity Strategic Bond

Standard Life Global Absolute Return Strategies

HSBC American Index

First State Global Emerging Markets Leaders

Templeton Global Total Return Bond

Henderson UK Property Trust

Cazenove UK Opportunities

Old Mutual Monthly Income Bond

Artemis High Income

M+G Global Dividend

The rise in the Fixed Interest sector has been driven by particularly strong sales of two sterling strategic bond funds: namely Fidelity Strategic Bond and Old Mutual Monthly Income, with the Fidelity Strategic Bond fund being the top selling fund in May.

HSBC American Index as the third bestselling fund. Skandia says it is unusual for a passive fund to feature in the top selling list. The firm notes the inclusion of Henderson UK Property Trust – the first time we have seen a property fund in the top 10 this year, and could signal the willingness of investors to move into other assets as a way of receiving income.

James Millard, Director of Investments at Skandia says: “In the current low bond yield environment it is becoming increasingly more complex allocating to fixed income. Strategic bond funds have benefited from this, with investors preferring to use skilled managers who have the flexibility to allocate across the fixed income universe. The emergence of property amongst the top selling funds alongside many other income oriented funds also reflects the continued search for sources of income and diversification away from traditional fixed income strategies.”

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