Investment funds under management hit a record high of £871 billion in 2015, up from £835 billion in 2014.
The figures, published by The Investment Association – a body that represents UK investment managers – come despite the turmoil in markets in the latter half of the year as a Chinese slowdown and commodity rout dented investor sentiment.
UK Equity Income was once again the best-selling fund sector of the year. Meanwhile tracker funds, which aim to replicate performance of a particular stock market index such as the FTSE, had their best year ever.
Guy Sears, interim chief executive of The Investment Association says: “Despite market uncertainty surrounding China, commodity prices and central bank interest rate policy throughout 2015, we saw funds under management of authorised investment funds hit an all-time high of over £870 billion.”
Equity is best selling asset class
The Investment Association stats also reveal that equity was the best-selling asset class for the second consecutive year with net retail sales of £8.4 billion.
Property was the second best-selling class with net retail sales of £2.7 billion, down from £3.8 billion in 2014. While mixed asset was the third best-selling with net retail sales of £2.5 billion, down from £4 billion a year earlier.
UK Equity Income meanwhile was the best-selling Investment Association sector for the second year running with net retail sales of £4.3 billion.
Sales of tracker funds, also hit a record high in 2015 of £5.4 billion compared to £4.8 billion in 2014. Tracker funds under management hit an all time high of £108 billion, up from £93 billion in 2014.
Why has investing hit a record high?
Laith Khalaf, senior analyst at investment platform Hargreaves Lansdown, puts 2015’s record investment high down to unfavourable options to boost returns elsewhere.
“Private investors have still been squirreling money away into their pensions and individual savings accounts (Isas) despite the choppiness in stock markets seen throughout the latter half of last year,” he says.
“The low interest rate environment has no doubt helped people to invest more by reducing their mortgage payments, as well as making cash savings look relatively unattractive.
“The pension freedoms introduced last April have also boosted fund sales by encouraging more people to invest some of their pension at retirement, rather than simply buying an annuity.”