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Collective Investments - UK - July 2014

Published By :

Mintel

Published Date : Jul 2014

Category :

Banking

No. of Pages : 174 Pages


To many people, the very word \'risk\' implies that they are likely to lose their money. This needs to change. One of the most powerful things that providers can do to reduce people\'s anxiety about risk, is to encourage them to think long term.
Table of Content

Introduction

Abbreviations

Executive Summary

The market
Growth in gross retail sales of open-ended funds set to continue in 2014 and beyond
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
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
Figure 3: Value of savings and investments, May 2014
Investment product ownership
Figure 4: Investment product ownership, May 2014
Planned investment product ownership
Figure 5: Planned investment product ownership, May 2014
Investment goals
Figure 6: Investment goals, May 2014
Investment plans
Figure 7: Investment plans over the next 12 months, May 2014
Choosing an investment fund
Figure 8: Factors influencing choice of investment fund, May 2014
Attitudes towards saving and investing
Figure 9: Attitudes towards saving and investing, May 2014
Barriers to investing
Figure 10: Barriers to investment product ownership, May 2014
What we think

Issues and Insights

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

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

Key points
Rising FTSE helping to boost demand for retail investment products
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
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
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?

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

Key points
Open-ended funds
Value of retail sales of unit trusts and OEICs – UK-domiciled
Figure 14: Value of retail sales of unit trusts and OEICs – UK-domiciled, 2009-13
Market prospects as of June 2014
Five-year forecast
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
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
Figure 18: Number of closed-ended investment companies and value of assets, April 2012-April 2014

Segment Performance

Key points
Net retail sales of equity and property unit trusts and OEICs soar in 2013
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)
Figure 20: Unit trust/OEIC funds under management (UK-domiciled only), by asset class, 2009-13 (year-end)

Market Share

Key points
Invesco Perpetual and M&G are the largest retail fund management firms
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
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
Figure 23: Top 20 investment management groups, ranked by assets under management, April 2014

Companies and Products

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

Key points
Adspend on collectives and investment ISAs up 15% in year to April 2014
Figure 24: Advertising expenditure on collective investments and investment ISAs, 2011/12-2013/14
Top advertisers of collective investments and investment ISAs
Figure 25: Top advertisers of collective investments and investment ISAs, 2011/12-2013/14
Advertising expenditure on collective investments and investment ISAs
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

Key points
92% of gross retail sales of unit trusts and OEICs are intermediated
Figure 27: Gross retail sales of unit trusts and OEICs, by distribution channel, 2009-13
Majority of intermediated sales are via fund platforms
Figure 28: Share of gross retail unit trust and OEIC sales, by distribution channel, 2013

Value of Savings and Investments

Key points
Three in 10 adults have £10,000 or more available to invest
Figure 29: Value of savings and investments, May 2014
Wealth acquisition tends to be a decades-long pursuit
Figure 30: Value of savings and investments, by gender, age, socio-economic group and household income, May 2014

Investment Ownership

Key points
Just one in eight adults own a collective investment
Figure 31: Investment ownership, May 2014
Investment ownership strongly skewed toward the well-off
Collective investment ownership rises along with savings levels
Figure 32: Investment ownership, by value of savings and investments, May 2014

Planned Investment Ownership

Key points
Two in five adults plan to take out an investment in the next year
Figure 33: Planned investment ownership, May 2014
Planned purchase activity highest among the wealthy and under-35s
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
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

Key points
The number one reason people invest is to growth their wealth
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
Figure 38: Investment goals, by value of savings and investments, May 2014

Investment Plans

Key points
Two in five investors plan to add to their investments in the next year
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
Figure 40: Investment plans over the next 12 months, by value of savings and investments, May 2014

Choosing an Investment Fund

Key points
Low annual fees and charges the priority when choosing a fund
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
Figure 42: Factors influencing choice of investment fund, by value of savings and investments, May 2014
Those with no investment experience value brand name
Figure 43: Factors influencing choice of investment fund, by collective investment ownership, May 2014

Attitudes towards Saving and Investing

Key points
Low interest rates helping to boost interest in collective investments
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
Figure 45: Attitudes towards saving and investing, by value of savings and investments, May 2014
The active versus passive fund management debate
Figure 46: Attitudes towards saving and investing, by collective investment ownership, May 2014
Figure 47: Attitudes towards saving and investing, by value of savings and investments, May 2014

Barriers to Investing

Key points
Lack of money and aversion to risk the top barriers to investing
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
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

Figure 50: Best and worst case forecast of gross retail sales of unit trusts and OEICs (UK-domiciled), 2014-19

Appendix – Value of Savings and Investments

Figure 51: Value of savings and investments, by demographics, May 2014
Figure 52: Value of savings and investments, by demographics, continued, May 2014
Figure 53: Value of savings and investments, by demographics, continued, May 2014

Appendix – Investment Ownership

Figure 54: Investment ownership, by demographics, May 2014
Figure 55: Investment ownership, by demographics, May 2014 (continued)
Figure 56: Investment ownership, by demographics, May 2014 (continued)
Filtered on adults who own an investment
Figure 57: Investment ownership, by demographics, May 2014
Figure 58: Investment ownership, by demographics, May 2014 (continued)
Figure 59: Investment ownership, by demographics, May 2014 (continued)

Appendix – Planned Investment Ownership

Figure 60: Planned investment ownership, by demographics, May 2014
Figure 61: Planned investment ownership, by demographics, May 2014 (continued)
Figure 62: Planned investment ownership, by demographics, continued, May 2014
Filtered on all adults who plan to take out an investment
Figure 63: Planned investment ownership, by demographics, May 2014
Figure 64: Planned investment ownership, by demographics, May 2014 (continued)
Figure 65: Planned investment ownership, by demographics, May 2014 (continued)

Appendix – Investment Goals

Figure 66: Investment goals, by demographics, May 2014
Figure 67: Investment goals, by demographics, continued, May 2014
Figure 68: Investment goals, by demographics, continued, May 2014

Appendix – Investment Plans

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
Figure 71: Investment plans over the next 12 months, by demographics, May 2014 (continued)

Appendix – Choosing an Investment Fund

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)
Figure 74: Factors influencing choice of investment fund, by demographics, May 2014 (continued)

Appendix – Attitudes towards Saving and Investing

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
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
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
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
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

Appendix – Barriers to Investing

Figure 85: Barriers to investment product ownership, by demographics, May 2014
Figure 86: Barriers to investment product ownership, by demographics, continued, May 2014
Figure 87: Barriers to investment product ownership, by demographics, May 2014 (continued)

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