UK Collective Investments 2007
Datamonitor
September 20, 2007 49 Pages - SKU: DFMN1561315
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Countries covered: United Kingdom
Introduction
This report provides comprehensive analysis of UK collective investments, focusing in particular on unit trusts, OEICS and investment trusts. Insight is also given into the prominent issues affecting these investments as well as the latest regulatory developments; all of which will prove essential towards understanding the current shape of the market and how this profile may change going forward.
Scope- UK unit trusts/OEICS and Investment Trusts
- Historic data from 2002-2006 and forecast to 2011
- A selection of consumer data covering approaches to collective investments
- Ranking of top competitors in the collective investment market
Highlights
Retail assets held in collective investment vehicles have shown a compound annual growth rate of close to 20% for the past five years, which is more than double the rate of other retail S&I products.
Among collective investments, unit trusts and OEICs continue to be the dominant products in terms of funds under management, largely due to their open-ended nature, which is preferred by consumers over closed-ended investment trusts.
Following the decline in investment trust balances as a result of the equity market downturn in 2002, the investment trust market has now recovered and both non-retail and retail sectors are growing at a steady pace. However, they continue to make up a very small proportion of retail savings & investments balances in the UK.
Reasons to Purchase- Assess the relative size and industry dynamics the UK collective investment markets to clearly identify the key strategic issues
- Gain a detailed view of competitive developments including comprehensive competitor data and market share information
- Access independent forecasts of UK unit trusts/OEICS and Investment Trusts to identify product sectors for future investment
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- Overview
- Catalyst
- Summary
- EXECUTIVE SUMMARY
- Collective Investments have taken the market share of other products but are only the 3rd largest product group in the UK retail savings & investments market
- OEICs are the dominant product within the open-ended segment and most of them lie outside an ISA or PEP wrapper
- Despite holding a low proportion of the collective investment market, investment trusts have also seen strong growth in the last 5 years
- Fundamental regulatory change in the shape of the UCITS Directive is aiming to realize the ""European passport"" idea for collective investments
- However, UCITS seems to be missing its most basic objectives
- Table of Contents
- Table of figures
- Table of tables
- Collective investment overview
- Datamonitor forecasts do not see big gains for mutual funds
- Collective investments are only the 3rd largest product group
- Collective investments have taken market share of other S&I products
- The dominance of open-ended structures remains unchanged
- Collective investments are forecast to lose market share
- Fundamental regulatory change is taking place in the UK
- The UCITS Directive is meant to realize the ""European passport"" idea for collective investments
- UCITS has been unable to keep pace with a rapidly changing mutual funds market
- So far, UCITS is missing its most basic objectives
- The challenges for fund regulation continue
- The limitations of UCITS led to the regulation of NURS in the UK
- A preliminary assessment hints at critical adjustments to UCITS III
- MiFID is causing considerable costs to the industry
- Key objectives and measures centre around increased competition while protecting consumers
- The implementation of MiFID is accompanied by major regulatory change in the UK
- Under current cost estimates, MiFID would only benefit the industry after 10 years
- The FSA may be easing restrictions on alternative investments for retail customers
- The FSA's Retail Distribution Review could lead to substantial changes in distribution
- The FSA has identified market failures in the distribution of retail investment products
- Depolarisation as a shake-up in the intermediary sector...
- ... is causing confusion for consumers and advisors alike
- The FSA's Retail Distribution Review proposes radical change to the financial advice sector
- Industry expectations for indirect online fund distribution are high
- Data
- Unit trusts and OEICs
- UK retail investors are not ready for more widespread fund holdings
- Net inflows into retail funds have finally increased in 2006
- Net inflows reveal how long the biggest chunk of the market, retail funds, suffers from a market downturn
- OEICs are the dominating products in the open-ended segment
- ISAs are not growing their share of the market
- OEICs have become increasingly popular
- Equity funds continue to be the preferred type of fund
- Distribution has changed following the market downturn and depolarization
- Intermediaries are now accounting for 81% of gross retail sales of unit trusts and OEICs
- Almost 50% of the market is in the hands of just 10% of the players
- Market concentration has increased since 2001
- Only a small proportion of UK households has invested in unit trust or OEICs
- 5% of UK households invest in unit trusts
- Men are more likely to invest in mutual funds than women
- Data
- investment trusts
- Investment Trusts have seen strong growth over the last five years, primarily driven by the retail sector
- However, they constitute a very minor segment of the overall UK retail savings & investments market
- Property funds have experienced particularly high growth over the last 5 years, but it is global growth funds that remain the largest investment sector by total assets
- And investor interest in property may see investment trusts switch from UK to EU property
- JP Morgan heads the list of the top investment trust managers by assets under management
- Investment trust companies celebrate VAT ruling
- Data
- APPENDIX
- Definitions
- Independent Financial Advisors (IFAs)
- Gross Retail Sales
- Net Sales
- Share repurchases
- Deposits
- Investment trusts
- ISA
- OEICs
- Unit trusts
- Personal Equity Plan
- UCITS - Undertakings for Collective Investment in Transferable Securities
- Non-UCITS Retail Scheme
- MiFID - Markets in Financial Instruments Directive
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Total value of UK retail savings & investments market by broad product line, GBPbn, 2002-2006
- Table 2: Total forecast value of UK retail savings & investments market by broad product line, GBPbn, 2006-2011
- Table 3: Total unit trust/OEIC funds under management segmented by investor, GBPbn, 2002-2006
- Table 4: Breakdown of UK retail sales, segmented into repurchases and net inflows, GBPbn, 2002-2006
- Table 5: Unit trust & OEIC funds under management by type, GBPbn, 2002-2006
- Table 6: TypeTableTitleHere
- Table 7: Total number of open-ended funds, of which OEICs, GBPbn, 2002-2006
- Table 8: Gross retail sales of unit trusts and OEICs in the UK by distribution channel, %, 2002-2006
- Table 9: Top 30 managers by total assets under management, including OEICs, PEPs & ISAs, %, 2001 & 2005
- Table 10: Proportion of households in each weekly income bracket with unit trusts, %, 2002-2006
- Table 11: Proportion of households throughout the UK with unit trusts, segmented by region, %, 2002-2006
- Table 12: Proportion of males and females in each age band with unit trusts, %, 2005
- Table 13: Total investment trusts under management, segmented by investor, GBPbn, 2002-2006
- Table 14: Total value of UK retail savings & investments market by broad product line
- Table 15: Top 6 conventional investment trust sectors by total assets, 2002-2006, GBPm
- Table 16: Top investment trust providers by funds under management and market share, 2002-2006
- Table 17: Top 30 investment trust providers by assets under management, 2002-2006, GBPm
- Table 18: Market share of top 30 investment trust companies by assets under management
- List of Figures
- Figure 1: Mutual funds assets are still dwarfed by the huge amount of deposits, 2002-6
- Figure 2: Investment trusts have remained a niche, 2006
- Figure 3: Mutual funds will grow slower than other S&I products, 2006-2011f
- Figure 4: Datamonitor forecasts assets held in collective investments to amount to GBP438bn in 2011
- Figure 5: Retail unit trusts and OEICS totaled GBP365bn in 2006
- Figure 6: Retail net inflows have only truly picked up again in 2006, 2002-6
- Figure 7: ISA funds have not grown their share of unit-trust/OEIC funds under management, 2002-6
- Figure 8: OEICs are now holding 62% of funds under management within open-ended structures, 2002-6
- Figure 9: OEICs now represent 64% of open-ended funds, 2002-6
- Figure 10: Equity funds continue to dominate 75% of the market, 2006
- Figure 11: Intermediaries have strengthened their position as key distribution channel, 2002-6
- Figure 12: Market concentration for the Top 10 fund managers has increased by 4 percentage points, 2002-5
- Figure 13: Fidelity continues ahead of the competition, 2005
- Figure 14: There is a clear positive link between fund investment and household income, 2002-6
- Figure 15: Fund investment is more frequent in wealthier parts of the UK, 2002-6
- Figure 16: More men invest in mutual funds than women, 2005/6
- Figure 17: The retail sector is catching up with the institutional side, 2002-6
- Figure 18: JP Morgan and F&C both have the largest investment trust market share
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