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2017 sets new record for adviser purchases of investment companies

10 January 2018

Purchases reach £745m in just nine months.

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 reached a record level of £745m in the first nine months of 2017, already surpassing the total for the whole of 2016 (£671m) and 2015 (£698m), which was the previous record.

In Q3 2017 investment company purchases totalled £235m, up 35% on the same quarter of the previous year (£175m). However, quarterly purchases were lower than in Q1 2017 (£252m) or Q2 2017 (£257m), reflecting the trend in platform purchases of all products, which fell in Q3 relative to the previous two quarters.

The most popular sectors in Q3 2017 were Global (18%), UK Equity Income (10%), Property Direct – UK (10%) and Property Specialist (8%). It’s interesting that two of the four most popular sectors were property sectors. Fourth is the highest ranking for the Property Specialist sector since records began. The quarter saw the launch of three new companies in the sector (Residential Secure Income REIT, Triple Point Social Housing REIT and Warehouse REIT) as well as fundraisings from Empiric Student Property and GCP Student Living.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC) said: “It’s fantastic that 2017 is already a record year for adviser investment company purchases, even without counting purchases in the fourth quarter. Advisers are clearly recognising the benefits of investment companies including their strong long-term performance, income advantages and suitability for illiquid assets.

“The latest quarterly data also shows the continuing popularity of property investment companies since the Brexit vote, and the problems experienced by open-ended property funds. There was significant fundraising in the quarter, and for the first time, property sectors made up two of the four most popular sectors for advisers and wealth managers.”

Additional findings

  • Total purchases on platforms were £29.7bn in Q3 2017, 13% up on Q3 2016, but lower than in Q1 2017 (£31.4bn) and Q2 2017 (£32.6bn).
  • The main adviser platforms for investment company purchases during Q3 2017 were Transact with 41% of the market, followed by Alliance Trust Savings and Ascentric with 18% each. FundsNetwork took a 6% share, Raymond James 5% and 7IM 4%.

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Notes

  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs.  The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 347 members and the industry has total assets of approximately £171 billion.
  2. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.

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