After a challenging couple of years, the business climate for providers of retail investment products and services improved dramatically in 2013. The value of gross retail sales of unit trusts and open-ended investment companies (OEICs) soared during the year, and the volume of new investment trust retail sales also grew after declining heavily the previous year. First quarter figures are highly encouraging and indicate that 2014 is set to be another strong year for the industry.
A key factor behind the collective investment market’s resurgence in the past year has been the notable improvement in the UK’s economic performance. After years of bumpy growth, the economy has shown more consistency. This has helped to boost the performance of the stock market, bring down unemployment, and reduce pressure on household incomes.
It must of course be noted that this has all happened against the backdrop of a record-low base rate. For savers frustrated by poor rates of return on traditional savings products, this has been highly influential in boosting demand for retail investment products. However, due to the improvement in the economic environment an increase in the base rate is looking increasingly likely within the next year. This is significant, because rising interest rates could potentially hamper demand for investment products like collectives if rates on cash-based savings start to look more attractive.
This report explores the market for collective investment funds, covering a number of topics including analysis of the key economic and regulatory factors driving the market. The report also details changes in market share as well as a breakdown of distribution patterns. The market size and segmentation sections provide a detailed account of retail sales trends, and include a five-year forecast of unit-trust and OEIC gross retail sales. The final sections of the report present readers with the most interesting findings from Mintel’s exclusively commissioned research into collective investments. This includes analysis of consumer investible asset levels, existing and planned investment ownership, investment goals and plans, and attitudes and behaviour toward collective investments and retail investing in general.
Abbreviations
| ABI | Association of British Insurers |
| AIC | Association of Investment Companies |
| AIFMD | Alternative Investment Fund Managers Directive |
| AMC | Annual Management Charge |
| AWE | Average Weekly Earnings |
| BoE | Bank of England |
| BNY | Bank of New York (Mellon) |
| CGT | Capital Gains Tax |
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