-Q2 purchases of investment companies second highest on record
-Most popular sectors were Global and Property Direct – UK
Latest research from the Association of Investment Companies (AIC) using Matrix Financial Clarity has revealed purchases of investment companies by advisers and wealth managers on adviser platforms hit a record level in the first half of 2017 at £514m, the highest figure ever for the first six months of a year. This represented an increase of 74% on investment company purchases in the first half of 2016 (£296m) and a 26% increase on investment company purchases in the first half of 2015 (£408m).
Looking at Q2 2017 alone, purchases of investment companies on adviser platforms reached £264m, the second-highest quarterly level of purchases on record. This was up 6% on the previous quarter (£249m) and 63% higher than Q2 2016 (£162m). The only quarter with a higher value of investment company purchases was Q2 2015 (£274m), when Woodford Patient Capital Trust launched.
The most popular sectors were Global (15% of purchases), Property Direct – UK (13%), UK Equity Income (11%) and Private Equity (6%). While Global and UK Equity Income always feature among the top sectors, the Property Direct – UK sector jumped in popularity following the EU referendum last year. This is also the first time that Private Equity has been ranked this highly and accounted for such a large share of purchases.
Ian Sayers, Chief Executive of the Association of Investment Companies said:
“It’s extremely positive to see adviser purchases at record levels in the first half of 2017.
“It’s clear that advisers are not only recognising the benefits of investment companies for equities but are increasingly aware of the strength of the closed-ended structure for accessing illiquid assets. The Property Direct – UK sector has been popular since the problems of open-ended property funds last year, and it’s interesting to see that the Private Equity sector, one of the few ways investors can access portfolios of unquoted companies, is gaining adviser interest.”
- The most popular sectors were Global (15% of purchases), Property Direct – UK (13%) and UK Equity Income (11%). The fourth most popular sector was Private Equity (6% of purchases). Following Private Equity were three other alternative sectors: Infrastructure (6%), Property Specialist (5%) and Debt (4%).
- Total purchases of all products on adviser platforms also showed growth, but at a lower rate. They reached £33.8bn in Q2 2017, 4% higher than the previous quarter (£32.5bn) and 20% up on Q2 2016 (£28.2bn).
- The main adviser platforms used for investment company purchases during Q2 2017 were Transact, with a market share of 40%, Alliance Trust Savings with 24%, Ascentric with 16% and FundsNetwork with 8%.