From the number of forthcoming funds on the launch pad an observer would hardly guess that the UK fu...
From the number of forthcoming funds on the launch pad an observer would hardly guess that the UK funds industry is having a lean summer when it comes to sales.
There are planned fund offerings from groups such as Artemis, MFS, Friends Ivory & Sime, JO Hambro, Polar Capital, BWD Rensburg, Scottish Widows, Royal & SunAlliance, Norwich Union, New Star, Jupiter, Forsyth and Hiscox.
This at a time when net retail fund sales have fallen to their lowest level in years. According to Autif figures, sales in July came to around £504m, this when New Star drew in some £200m in sales into its newly launched funds.
The July 2001 figures compare to last year when the sales figure for July was £1.23bn. In July 1999, the sales figure was roughly the same, at £1.24bn, and in July 1998 it was £705m.
As short a time ago as April, investment funds were maintaining their popularity, with £1.9bn in net sales posted in April, compared to April 2000 sales of £2.4bn. The most successful month for retail sales between 1998 and today, unsurprisingly, was in March 1999 when Autif recorded net retail sales of £3.03bn. This makes the £504m look a little paltry and most believe July was a rather lively month compared to sales so far in August. While August has always been considered a slow month, it posted £1.47bn last year, £1.03bn in 1999 and £431m in 1998.
So why all the fund launches? It is partly because marketing departments are used to bringing out funds in the autumn and partly because there are plenty of groups trying to establish themselves.
As such, they need to launch funds no matter what the condition of the equity market.
Despite this, with equities being depressed, now is a good time to be launching a fund from an investment rather than a marketing or sales point of view.
If investing is about being contrarian, buying low and selling high, then the funds coming to the market now are well placed to do that. They are also giving themselves the ability to build up a very nice since launch track record in three or more years' time.
This is a welcome contrast to the number of groups which launched tech funds at the height of the bubble with a marketing rather than an investment message behind them.
Has run Cautious Managed fund since 2011
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Invested from 2006-2011