Pridham Report: Sustainable fund groups popular in Q1

Sustainable fund providers saw their retail sales boosted in the Q1 as coronavirus crisis better unfolded


Natalie Kenway and Jessica Tasman-Jones

Sustainable fund providers saw their retail sales boosted in the Q1 of 2020 as investors flocked to funds that withstood the coronavirus market crisis better than their peers

In the Pridham Report, which shows the retail sales of UK domiciled funds, for the first three months of the year, Royal London Asset Management (RLAM), Liontrust and Rathbones were in the top 10 groups for flows due to sales of sustainable funds.

RLAM was the fourth highest in terms of both net retail sales and gross sales for the three-month period, with flows of £3bn and £463.4m respectively, with the Royal London Sustainable Leaders fund being the biggest contribution to net business.

In an interview with Portfolio Adviser earlier this year, fund manager Mike Fox said assets in his sustainable range tended to be stickier than assets in traditional funds not focused on responsible investment.

Liontrust and Rathbones benefited from the same themes with the former enjoying net flows across the whole of its Sustainable Future range, while at the latter the Ethical Bond fund remained popular.

Overall, in what Helen Pridham, editor of the report, described as a “quarter of two halves for the fund management industry”, Allianz Global Investors posted its best ever quarterly sales figures for UK-domiciled funds thanks largely to Mike Riddell’s fixed income fund,

Its net inflows were £570.5m in Q1 2020, the third best group for the quarter behind Blackrock, which landed £1.4bn in net sales, and HSBC Global Asset Management, which drew in £868.7m.

Editor Helen Pridham said asset managers have indicated Q2 has started off on a quieter note with investors viewing current market conditions as a buying opportunity.

“Advisers know that most investors are in it for the long term and are therefore remaining invested.

“The ‘fear of missing out’ on a market recovery is also helping to reduce redemptions.  However, the industry may have to wait for some time before much new money starts flowing into funds again.”

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