Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- The market
- Gross retail sales of open-ended funds expected to grow in 2013 and onwards
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- Figure 1: Forecast for gross retail sales of unit trusts and OEICs (UK domiciled), 2008-18
- Closed-ended sector is significantly smaller
- The majority of funds are sold via intermediated channels
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- Figure 2: Gross retail sales of unit trusts and OEICs, by distribution channel, 2008-12
- Competing retail investment products
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- Figure 3: Retail investment product sales, by volume, year to 31 March 2012
- Market factors
- Economic uncertainty continues to test investor fortitude
- Key regulatory changes
- Companies, brands and innovations
- Market share is concentrated at the top
- Adspend on investment products and intermediary services was down in 2012/13
- Who’s innovating?
- The consumer
- Value of savings and investments
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- Figure 4: Value of savings and investments, May 2013
- Investment portfolio
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- Figure 5: Savings and investment portfolio, May 2013
- Saving and investing goals
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- Figure 6: Saving and investment goals, May 2013
- Influential factors when choosing an investment fund
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- Figure 7: Important factors when choosing an investment fund, May 2013
- Average length of time consumers hold investments
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- Figure 8: Average length of time investments held, May 2013
- Consumer attitudes towards saving and investing
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- Figure 9: Attitudes towards investing and investments, May 2013
- What we think
Issues in the Market
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- Why are investors shunning equity-based products?
- How many adults are considering investing in collective funds in the next 12 months?
- What are consumers’ main saving and investing goals?
- Do investors look for passive or active fund management?
Trend Application
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- Watch your investment grow from the sidelines
- Becoming a self-taught investor
- Mintel futures: Generation Next
Market Drivers
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- Key points
- Planned buying and selling of shares/unit trusts contracted in Q2/3 2013
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- Figure 10: Intended investment activity, Q3/Q4 2002-Q2/Q3 2013
- FTSE 100 trading at its highest point since the financial crisis
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- Figure 11: FTSE 100 and FTSE All-Share – daily index movements, January 2006-May 2013
- RDR should have a positive impact on investment trusts
- FCA bans cash rebates on platforms
- MIFID II and the potential conflict with the RDR
- PRIPs update
- BoE base rate remains at historical low
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- Figure 12: Average annual changes in the Bank of England base rate, CPI and RPI – UK, March 2008- March 2013
- Households continue to face income squeeze
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- Figure 13: Monthly change in RPI and average weekly earnings, March 2008-March 2013
Competitor Products
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- Key points
- There is some overlap among competing retail investment products
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- Figure 14: Retail investment product sales, by volume, year to 31 March 2012
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- Figure 15: Market value of funds held in stocks and shares ISAs, 2012
- Unit trusts and OEICs significantly outsell investment bonds
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- Figure 16: New investment bond premiums versus gross retail unit trust/OEIC sales, 2009-12
- ETFs should continue to gain momentum among UK investors
SWOT Analysis
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- Figure 17: UK collective investment market – SWOT analysis, 2013
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Who’s Innovating?
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- Key points
- Fundsmith launches regular withdrawal facility
- THS Partners opens up access to its top-performing fund to retail investors
- Candid Money launches fund supermarket comparison site
- Exec-only platform to cater for low-value clients post-RDR
- Fidelity launches a four-tier investment service
Market Size and Forecast
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- Key points
- Open-ended funds
- Net sales of OEICs continue to fall, declining by a quarter in 2012
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- Figure 18: Value of retail sales of unit trusts and OEICs – UK-domiciled, 2008-12
- Market prospects as of June 2013
- Five-year forecast
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- Figure 19: Forecast for gross retail sales of unit trusts and OEICs (UK domiciled), 2008-18
- Figure 20: Forecast of gross retail sales of unit trusts and OEICs (UK domiciled), at current and constant prices, 2008-18
- Forecast methodology
- Fan chart explanation
- Closed-ended funds
- Retail investment trust sales declined by 40% in 2012
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- Figure 21: Volume of regulated retail sales of investment trusts, unit trust/OEICs and stocks and shares ISAs, 2008-12
- RDR brightens the outlook for investment companies
- A quarter of closed-ended companies operate offshore
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- Figure 22: Number of closed-ended investment companies and value of assets, March 2011-March 2013
Segment Performance
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- Key points
- Open-ended sector – net sales decline by a quarter in 2012
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- Figure 23: Net retail unit trust/OEIC fund sales (UK-domiciled), by asset class, 2008-12
- Equity-based funds account for a large proportion of open-ended funds
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- Figure 24: Unit trust/OEIC funds under management (UK-domiciled only), by asset class, 2008-12 (year-end)
Market Share
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- Key points
- Invesco Perpetual and M&G Securities maintain their lead
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- Figure 25: Top 20 fund managers, by retail and private client funds under management (minimum lump sum is £50,000 or less), March 2011-March 2013
- Top ten account for 75% of ISA fund market
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- Figure 26: Top ten ISA fund managers, by ISA and PEP funds under management, 2011-13
- St James’s Place grows share of ISA fund market
- JPMorgan is the largest investment trust provider
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- Figure 27: Top 20 investment management groups, ranked by assets under management, March 2013
Companies and Products
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- Top three unit trust/OEIC fund managers
- Invesco Perpetual
- Unit trust/OEIC retail funds under management as at 31 March 2013
- Company description
- Product range
- Recent activity
- M&G Securities
- Unit trust/OEIC retail funds under management as at 31 March 2013
- Company description
- Product range
- Recent activity
- Recent promotional activity
- BNY Mellon
- Unit trust/OEIC retail funds under management as at 31 March 2013
- Company description
- Product range
- Recent activity
- Recent promotional activity
- Top three investment trust managers
- JPMorgan Asset Management
- Investment trust assets under management as at 31 March 2013
- Company description
- Product range
- Recent activity
- F&C Investments
- Investment trust assets under management as at 31 March 2013
- Company description
- Product range
- Recent activity
- Recent promotional activity
- Aberdeen Asset Management
- Investment trust assets under management as at 31 March 2013
- Company description
- Product range
- Recent activity
- Recent promotional activity
Brand Communication and Promotion
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- Key points
- Adspend shrank in the year to March 2013 by almost a third
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- Figure 28: Total advertising expenditure on investment products and intermediary services, by product category, 2010/11-2012/13
- Fidelity accounts for the largest proportion of industry adspend
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- Figure 29: Top ten advertisers of collective investments and stocks and shares ISAs, 2010/11-2012/13
- Press advertising accounts for two thirds of adspend
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- Figure 30: Adspend on collective investments and stocks and shares ISAs, by media type, 2010/11-2012/13
- A note about adspend
Channels to Market
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- Key points
- Intermediated business accounts for 91% of unit trust/OEIC sales
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- Figure 31: Gross retail sales of unit trusts and OEICs, by distribution channel, 2008-12
- Fund platforms account for over two fifths of intermediated sales
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- Figure 32: Share of gross retail unit trust and OEIC sales, by distribution channel, 2012
- The impact of the RDR
Value of Savings and Investments
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- Key points
- Half of adults have less than £10,000 in savings and investments
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- Figure 33: Value of savings and investments, May 2013
- Older people have higher-valued assets, but young investors should not be overlooked
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- Figure 34: Value of savings and investments, by age, May 2013
- Affluence is influential, however, starting small can yield big results
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- Figure 35: Most popular value of savings and investments, by household income, May 2013
Investment Portfolio
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- Key points
- British investors show a strong preference towards risk-free and simple products
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- Figure 36: Savings and investment portfolio, May 2013
- One in nine adults own a collective investment fund
- Ownership of collective investments is skewed towards older, affluent males
- High-net-worth clients more likely to own collective investment products
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- Figure 37: Savings and investment portfolio, by value of savings and investments, May 2013
Saving and Investing Goals
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- Key points
- Emergencies and security top reasons for saving/investing
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- Figure 38: Saving and investment goals, May 2013
- Saving and investment goals tend to be age-specific
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- Figure 39: Saving and investment goals, by age, May 2013
- Retirement savings become more important later in life
- High-net-worth clients more likely to have a number of savings and investment goals
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- Figure 40: Saving and investment goals, by value of savings and investments, May 2013
Influential Factors When Choosing an Investment Fund
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- Key points
- Low fees and charges are the most influential factor for retail investors
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- Figure 41: Important factors when choosing an investment fund, May 2013
- Collectives investors have slightly different priorities
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- Figure 42: Important factors when choosing an investment fund, by ownership of collective investments, May 2013
- Active versus passive fund management
- Actively managed funds more appealing to high-net-worth savers
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- Figure 43: Important factors when choosing an investment fund, by value of savings and investments, May 2013
Average Length of Time Consumers Hold Investments
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- Key points
- Investors tend to keep their holdings for more than a year
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- Figure 44: Average length of time investments held, May 2013
- High-net-worth clients more likely to save for the long term
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- Figure 45: Average length of time investments held, by value of savings and investments, May 2013
Consumer Attitudes Towards Saving and Investing
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- Key Points
- A large proportion of adults are simply risk averse
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- Figure 46: Attitudes towards investing and investments, May 2013
- Over-55s are less open to taking risks
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- Figure 47: Agreement with the statement ‘I can’t afford to take any risk with my money’, by age, May 2013
- Time constraints prevent some adults from investing…
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- Figure 48: Attitudes with the statement ‘I do not have time to choose my own investment’, by collective investment ownership and intentions to purchase, May 2013
- …but perceptions about costs and affordability are bigger barriers
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- Figure 49: Attitudes towards investing and investments, by collectives ownership, May 2013
- Adults with specific goals more frustrated by low interest rates
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- Figure 50: Agreement with the statement ‘Low interest rates have made me more interested in investment products, such as collectives and shares’, by saving and investment goals, May 2013
- Figure 51: Agreement with the statement ‘Low interest rates have made me more interested in investment products, such as collectives and shares’, by saving and investment goals, May 2013 (continued)
Appendix – Market Size and Forecast
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- Figure 52: Best and worst case forecast of gross retail sales of unit trusts and OEICs (UK domiciled), 2013-18
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Appendix – Value of Savings and Investments
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- Figure 53: Value of savings and investments, by demographics, May 2013
- Figure 54: Value of savings and investments, by demographics, May 2013 (continued)
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Appendix – Investment Portfolio
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- Figure 55: Ownership of savings account/cash ISAs, by demographics, May 2013
- Figure 56: Ownership of company pensions, by demographics, May 2013
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- Figure 57: Ownership of NS&I products, by demographics, May 2013
- Figure 58: Ownership of personal pensions, by demographics, May 2013
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- Figure 59: Ownership of equity-based investment, by demographics, May 2013
- Figure 60: Ownership of individual company shares, by demographics, May 2013
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- Figure 61: Ownership of collectives, by demographics, May 2013
- Figure 62: Ownership of investment property, by demographics, May 2013
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- Figure 63: Ownership of with-profits, unit-linked, money market, distribution or guaranteed investment bonds, by demographics, May 2013
- Figure 64: Ownership of investment trusts, by demographics, May 2013
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- Figure 65: Ownership of unit trusts/OEICs, by demographics, May 2013
- Figure 66: Ownership of SIPPs, by demographics, May 2013
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- Figure 67: Ownership of financial spread-betting accounts, by demographics, May 2013
- Figure 68: Ownership of ETFs, by demographics, May 2013
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- Figure 69: Ownership of other savings and investments, by demographics, May 2013
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Appendix – Saving and Investment Goals
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- Figure 70: Most important saving and investment goals, by demographics, May 2013
- Figure 71: Less important saving and investment goals, by demographics, May 2013
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Appendix – Influential Factors When Choosing an Investment Fund
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- Figure 72: Most important factors when choosing an investment fund, by demographics, May 2013
- Figure 73: Less important factors when choosing an investment fund, by demographics, May 2013
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Appendix – Average Length of Time Consumers Hold Investments
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- Figure 74: Average length of time investments held, by demographics, May 2013
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- Figure 75: Average length of time investments held, by demographics, May 2013 (continued)
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Appendix – Consumer Attitudes Towards Saving and Investing
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- Figure 76: Attitudes towards investing and investments – I can’t afford to take any risks with my money, by demographics, May 2013
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- Figure 77: Attitudes towards investing and investments – I prefer to save/invest for the long term, by demographics, May 2013
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- Figure 78: Attitudes towards investing and investments – I do not have enough money to make investing worthwhile, by demographics, May 2013
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- Figure 79: Attitudes towards investing and investments – I can’t afford the costs and charges involved with stockmarket investments, by demographics, May 2013
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- Figure 80: Attitudes towards investing and investments – I prefer to make my own investment decisions than use a fund manager to invest on my behalf, by demographics, May 2013
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- Figure 81: Attitudes towards investing and investments – I would look for a fund manager with a proven track record when choosing an investment product, by demographics, May 2013
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- Figure 82: Attitudes towards investing and investments – Low interest rates have made me more interested in investment products such as collectives and shares, by demographics, May 2013
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- Figure 83: Attitudes towards investing and investments – I have a clear investment plan, by demographics, May 2013
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- Figure 84: Attitudes towards investing and investments – I do not have time to choose my own investments, by demographics, May 2013
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