Table of Contents
Executive Summary
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- The market
- Growth in gross retail sales of open-ended funds set to continue in 2014 and beyond
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- Figure 1: Forecast for gross retail sales of unit trusts and OEICs (UK-domiciled), 2009-19
- New retail sales of investment trusts rise in 2013
- Large majority of investment funds sold via intermediaries
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- Figure 2: Gross retail sales of unit trusts and OEICs, by distribution channel, 2009-13
- Market factors
- Improvements in the economic environment helping to boost interest in investing
- RDR altering distribution mechanics of retail investment products
- EU regulatory update
- Companies, brands and innovation
- Market share is concentrated among top 10 fund management firms
- Collective investment and investment ISA adspend rises over the 2013/2014 period
- Who’s innovating?
- The consumer
- Value of savings and investments
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- Figure 3: Value of savings and investments, May 2014
- Investment product ownership
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- Figure 4: Investment product ownership, May 2014
- Planned investment product ownership
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- Figure 5: Planned investment product ownership, May 2014
- Investment goals
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- Figure 6: Investment goals, May 2014
- Investment plans
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- Figure 7: Investment plans over the next 12 months, May 2014
- Choosing an investment fund
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- Figure 8: Factors influencing choice of investment fund, May 2014
- Attitudes towards saving and investing
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- Figure 9: Attitudes towards saving and investing, May 2014
- Barriers to investing
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- Figure 10: Barriers to investment product ownership, May 2014
- What we think
Issues and Insights
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- What’s likely to happen when interest rates finally start to rise?
- The facts
- The implications
- Changing the way people think about risk
- The facts
- The implications
- More investors will require guidance in the DIY investment era
- The facts
- The implications
Trend Application
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- Developing a well thought-out investment plan and sticking to it
- Simplifying fund selection by ranking funds by degree of complexity
- Investing in foreign markets like a local
Market Drivers
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- Key points
- Rising FTSE helping to boost demand for retail investment products
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- Figure 11: FTSE 100 and FTSE All-Share – Daily index movements, January 2007-May 2014
- A rise in the base rate may hurt equity-based investment funds sales
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- Figure 12: Average annual changes in the Bank of England base rate, CPI and RPI – UK, April 2009- April 2014
- Easing pressure on incomes should free up more cash for investing
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- Figure 13: Monthly change in RPI and average weekly earnings, March 2009-March 2014
- Investors can now contribute up to £15,000 annually in a NISA
- RDR reshaping the mechanics of investment product distribution
- Investment trusts and ETFs now more likely to be considered
- FCA scraps cash rebates on platforms
- MiFID II update
- PRIPs Key Information Document (KID) approved by EU
Who’s Innovating?
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- Key points
- J.P. Morgan launches iPad app and multi-manager fund reporting tool
- New ETF provides UK investors direct access to top Chinese companies
- TD Direct launches ‘Fund Selector’ tool
- F&C launches capital protected RDR compliant share class
- Financial Express launches DIY investment platform Trustnet Direct
Market Size and Forecast
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- Key points
- Open-ended funds
- Value of retail sales of unit trusts and OEICs – UK-domiciled
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- Figure 14: Value of retail sales of unit trusts and OEICs – UK-domiciled, 2009-13
- Market prospects as of June 2014
- Five-year forecast
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- Figure 15: Forecast for gross retail sales of unit trusts and OEICs (UK-domiciled), 2009-19
- Figure 16: Forecast of gross retail sales of unit trusts and OEICs (UK-domiciled), at current and constant prices, 2009-19
- Forecast methodology
- Fan chart explanation
- Closed-ended funds
- New retail investment trusts sales rise by 4% in 2013
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- Figure 17: Volume of NEW regulated retail sales of investment trusts, unit trust/OEICs and stocks and shares ISAs, 2009-13
- Total value of investment trust assets under management on the rise
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- Figure 18: Number of closed-ended investment companies and value of assets, April 2012-April 2014
Segment Performance
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- Key points
- Net retail sales of equity and property unit trusts and OEICs soar in 2013
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- Figure 19: Net retail unit trust/OEIC fund sales (UK-domiciled), by asset class, 2009-13
- Unit trust/OEIC funds under management (UK-domiciled only)
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- Figure 20: Unit trust/OEIC funds under management (UK-domiciled only), by asset class, 2009-13 (year-end)
Market Share
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- Key points
- Invesco Perpetual and M&G are the largest retail fund management firms
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- Figure 21: Top 20 fund managers, by retail and private client funds under management (minimum lump sum is £50,000 or less), April 2012-April 2014
- St James’s Place takes over the top spot in the ISA fund market
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- Figure 22: Top ten ISA fund managers, by ISA and PEP funds under management, April 2012-April 2014
- J.P. Morgan maintains its position as the top investment trust provider
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- Figure 23: Top 20 investment management groups, ranked by assets under management, April 2014
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 30 April 2014
- Company description
- Product range
- Recent activity
- M&G Securities
- Unit trust/OEIC retail funds under management as at 30 April 2014
- Company description
- Product range
- Recent activity
- Recent promotional activity
- BNY Mellon
- Unit trust/OEIC retail funds under management as at 30 April 2014
- Company description
- Product range
- Recent activity
- Recent promotional activity
- Top three investment trust managers
- J.P. Morgan Asset Management
- Investment trust assets under management as at 30 April 2014
- Company description
- Product range
- Recent activity
- Recent promotional activity
- F&C Management
- Investment trust assets under management as at 30 April 2014
- Company description
- Product range
- Recent activity
- Recent promotional activity
- Aberdeen Asset Managers
- Investment trust assets under management as at 30 April 2014
- Company description
- Product range
- Recent activity
- Recent promotional activity
Brand Communication and Promotion
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- Key points
- Adspend on collectives and investment ISAs up 15% in year to April 2014
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- Figure 24: Advertising expenditure on collective investments and investment ISAs, 2011/12-2013/14
- Top advertisers of collective investments and investment ISAs
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- Figure 25: Top advertisers of collective investments and investment ISAs, 2011/12-2013/14
- Advertising expenditure on collective investments and investment ISAs
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- Figure 26: Advertising expenditure on collective investments and investment ISAs, by media type, 2011-12 and 2013-14
- A note on adspend
Channels to Market
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- Key points
- 92% of gross retail sales of unit trusts and OEICs are intermediated
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- Figure 27: Gross retail sales of unit trusts and OEICs, by distribution channel, 2009-13
- Majority of intermediated sales are via fund platforms
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- Figure 28: Share of gross retail unit trust and OEIC sales, by distribution channel, 2013
Value of Savings and Investments
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- Key points
- Three in 10 adults have £10,000 or more available to invest
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- Figure 29: Value of savings and investments, May 2014
- Wealth acquisition tends to be a decades-long pursuit
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- Figure 30: Value of savings and investments, by gender, age, socio-economic group and household income, May 2014
Investment Ownership
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- Key points
- Just one in eight adults own a collective investment
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- Figure 31: Investment ownership, May 2014
- Investment ownership strongly skewed toward the well-off
- Collective investment ownership rises along with savings levels
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- Figure 32: Investment ownership, by value of savings and investments, May 2014
Planned Investment Ownership
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- Key points
- Two in five adults plan to take out an investment in the next year
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- Figure 33: Planned investment ownership, May 2014
- Planned purchase activity highest among the wealthy and under-35s
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- Figure 34: Planned investment ownership, by value of savings and investments, May 2014
- Three fifths who already own a collective investment plan to buy more
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- Figure 35: Planned investment ownership, by existing investment ownership, May 2014
- Figure 36: Planned investment ownership, by existing investment ownership, May 2014 (continued)
Investment Goals
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- Key points
- The number one reason people invest is to growth their wealth
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- Figure 37: Investment goals, May 2014
- Investment priorities alter with age
- Greater levels of affluence lead to a greater focus on wealth preservation
- Investment goals change as the value of savings and investments rises
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- Figure 38: Investment goals, by value of savings and investments, May 2014
Investment Plans
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- Key points
- Two in five investors plan to add to their investments in the next year
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- Figure 39: Investment plans over the next 12 months, May 2014
- Older and affluent keen to make the most of the higher ISA allowance
- Younger investors looking to change things in the coming year
- Higher levels of planned activity among those with over £50K in savings
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- Figure 40: Investment plans over the next 12 months, by value of savings and investments, May 2014
Choosing an Investment Fund
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- Key points
- Low annual fees and charges the priority when choosing a fund
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- Figure 41: Factors influencing choice of investment fund, May 2014
- Track record generally seen as more important than brand…
- …but a well-known brand and star-manager still holds a lot of sway
- Under-35s and Londoners attracted by the notion of ethical investing
- Interest in foreign markets exposure strongest among the more affluent
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- Figure 42: Factors influencing choice of investment fund, by value of savings and investments, May 2014
- Those with no investment experience value brand name
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- Figure 43: Factors influencing choice of investment fund, by collective investment ownership, May 2014
Attitudes towards Saving and Investing
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- Key points
- Low interest rates helping to boost interest in collective investments
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- Figure 44: Attitudes towards saving and investing, May 2014
- Appetite for risk appears elevated at present
- A rise in the base rate may reduce demand for investment products
- In an era of DIY investing more investors will need guidance
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- Figure 45: Attitudes towards saving and investing, by value of savings and investments, May 2014
- The active versus passive fund management debate
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- Figure 46: Attitudes towards saving and investing, by collective investment ownership, May 2014
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- Figure 47: Attitudes towards saving and investing, by value of savings and investments, May 2014
Barriers to Investing
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- Key points
- Lack of money and aversion to risk the top barriers to investing
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- Figure 48: Barriers to investment product ownership, May 2014
- Age, gender and income dictate what is likely to be a barrier
- Those with money don’t invest due to a preference for safer products
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- Figure 49: Barriers to investment product ownership, by value of savings and investments, May 2014
- It’s okay to start small
- A longer-term mindset can help people think differently about risk
- Time constraints more likely to be a barrier for the young or better-off
Appendix – Market Size and Forecast
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- Figure 50: Best and worst case forecast of gross retail sales of unit trusts and OEICs (UK-domiciled), 2014-19
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Appendix – Value of Savings and Investments
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- Figure 51: Value of savings and investments, by demographics, May 2014
- Figure 52: Value of savings and investments, by demographics, continued, May 2014
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- Figure 53: Value of savings and investments, by demographics, continued, May 2014
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Appendix – Investment Ownership
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- Figure 54: Investment ownership, by demographics, May 2014
- Figure 55: Investment ownership, by demographics, May 2014 (continued)
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- Figure 56: Investment ownership, by demographics, May 2014 (continued)
- Filtered on adults who own an investment
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- Figure 57: Investment ownership, by demographics, May 2014
- Figure 58: Investment ownership, by demographics, May 2014 (continued)
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- Figure 59: Investment ownership, by demographics, May 2014 (continued)
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Appendix – Planned Investment Ownership
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- Figure 60: Planned investment ownership, by demographics, May 2014
- Figure 61: Planned investment ownership, by demographics, May 2014 (continued)
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- Figure 62: Planned investment ownership, by demographics, continued, May 2014
- Filtered on all adults who plan to take out an investment
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- Figure 63: Planned investment ownership, by demographics, May 2014
- Figure 64: Planned investment ownership, by demographics, May 2014 (continued)
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- Figure 65: Planned investment ownership, by demographics, May 2014 (continued)
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Appendix – Investment Goals
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- Figure 66: Investment goals, by demographics, May 2014
- Figure 67: Investment goals, by demographics, continued, May 2014
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- Figure 68: Investment goals, by demographics, continued, May 2014
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Appendix – Investment Plans
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- Figure 69: Investment plans over the next 12 months, by demographics, May 2014
- Figure 70: Investment plans over the next 12 months, by demographics, continued, May 2014
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- Figure 71: Investment plans over the next 12 months, by demographics, May 2014 (continued)
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Appendix – Choosing an Investment Fund
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- Figure 72: Factors influencing choice of investment fund, by demographics, May 2014
- Figure 73: Factors influencing choice of investment fund, by demographics, May 2014 (continued)
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- Figure 74: Factors influencing choice of investment fund, by demographics, May 2014 (continued)
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Appendix – Attitudes towards Saving and Investing
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- Figure 75: Attitudes towards saving and investing, by collective investment ownership, May 2014
- Figure 76: Attitudes towards saving and investing, by value of savings and investments, May 2014
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- Figure 77: Attitudes towards saving and investing – Low interest rates on savings accounts have made me more interested in investment products, such as collectives and shares, by demographics, May 2014
- Figure 78: Attitudes towards saving and investing – I prefer to save/invest for the long term, by demographics, May 2014
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- Figure 79: Attitudes towards saving and investing – I’d be a more active investor if fees and charges were lower, by demographics, May 2014
- Figure 80: Attitudes towards saving and investing – The improvement in stock market performance in recent years has made me more interested in investment products, such as collectives and shares, by demographics, May 2014
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- Figure 81: Attitudes towards saving and investing – I have a well thought out savings/investment plan, by demographics, May 2014
- Figure 82: Attitudes towards saving and investing – I’m prepared to take on more risk in order to achieve higher returns, by demographics, May 2014
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- Figure 83: Attitudes towards saving and investing – It’s better to buy an investment fund than buy individual company shares, by demographics, May 2014
- Figure 84: Attitudes towards saving and investing – It’s better to buy investment funds that track the performance of an index, than buy funds that are actively managed by a fund manager, by demographics, May 2014
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Appendix – Barriers to Investing
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- Figure 85: Barriers to investment product ownership, by demographics, May 2014
- Figure 86: Barriers to investment product ownership, by demographics, continued, May 2014
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- Figure 87: Barriers to investment product ownership, by demographics, May 2014 (continued)
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