UK Collective Investments 2007

Published by: Datamonitor

Published: Sep. 20, 2007 - 49 Pages

Table of Contents

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

Abstract

• 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

• 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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