UK Property advisers’ most favoured investment company sector for first time in Q3

Latest research from the Association of Investment Companies (AIC) using Matrix Financial Clarity demonstrates that the Property Direct - UK sector was the most popular investment company sector for the first time ever accounting for 15% of adviser and wealth manager purchases of investment companies via platforms in Q3 2016.  

It was the second highest quarter on record for adviser and wealth manager purchases of investment companies via platforms with £179.7m* of investment companies purchased.  This represents an 18% increase compared to Q3 2015 (£152.8m) and an 11% increase in comparison to Q2 2016 (£161.6m).  The only quarter with higher purchases was Q2 2015 when Neil Woodford launched Woodford Patient Capital (£273.9m).

Ian Sayers, Chief Executive of the Association of Investment Companies said: “It’s telling that the Property Direct – UK sector was the most popular adviser sector in the quarter following the referendum vote. Given the problems experienced by the open-ended property funds at this time, more advisers have been recognising the benefits of holding illiquid assets like property in a closed-ended structure.

“The number of firms purchasing investment companies also rose to an all-time high in this quarter and this is reflected by demand for AIC training which is at record levels in 2016.  We are planning to reach even more advisers next year with our new online training service.”

Findings

• The number of firms purchasing investment companies on adviser platforms has reached another new record, increasing to 1,764 in Q3 2016, up 7% on Q2. This follows a large jump between Q1 and Q2 of 2016, from 1,236 firms to 1,647. This means that between Q1 and Q3, there has been a 43% increase in adviser and wealth management firms using investment companies.
• Following the EU referendum and the subsequent disruption to open-ended property funds, the AIC’s Property Direct – UK sector was, for the first time, the most popular sector for adviser purchases in Q3 2016, accounting for 15% of all investment company purchases. This is the first time the sector has exceeded a 10% share of all purchases.
• The next most popular sectors were UK Equity Income (14%), Global (11%) and Infrastructure (8%) and UK All Companies and UK Smaller Companies (each 4%).

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Notes

1. *Figure includes an estimate supplied by Matrix Financial Clarity for ATS purchases, which was unavailable for this quarter.
2. 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 345 members and the industry has total assets of approximately £150.7 billion.
3. 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.