Net retail sales fell to their lowest level in more than 20 years in 2016, according to the latest Pridham Report, although Fidelity and BlackRock bucked the trend.
The report, which analyses fund sales, found 2016 was a difficult year for asset managers as net retail sales reached the lowest level since 1995 as a result of volatility surrounding Brexit and Donald Trump's election to US President.
However, some groups such as Fidelity, Fundsmith and BlackRock managed to record strong positive sales.
Looking at net retail sales for the year as a whole, Fundsmith saw sales of £2.9bn followed by Fidelity which saw sales of £1.6bn, its strongest year in history. This was helped by funds such as Fidelity Moneybuilder Income, managed by Ian Spreadbury (pictured), and Fidelity Global Dividend, with only 10% of the firm's sales coming from tracker funds.
For the fourth quarter specifically, BlackRock was the top manager followed by Fundsmith, Royal London Asset Management and Old Mutual Global Investors. There was a significant jump between first and second place with BlackRock reporting sales of £1.1bn, helped by its passive fund range, and the next highest, Fundsmith, reporting sales of £479m.
Helen Pridham, editor of The Pridham Report, says "There is no doubt that BlackRock benefitted from the popularity of passive funds last year, and its sales of these funds at the end of the year were enhanced by an existing client switch.
"Its flows were also boosted by sales of its actively managed funds such as BlackRock Absolute Return Bond and BlackRock Continental European Income.
"But the success of Fundsmith Equity, which has regularly outperformed its benchmark, in achieving top net sales underlines the value of active management."
New entrants to the table in 2016 included Hargreaves Lansdown, which saw sales of £836m, and Premier Asset Management which reported sales of £699m.
The highest rising asset manager was Aviva Investors which jumped from 16th place in 2015 to fourth place in 2016 with sales of £1.1bn. This was due to the popularity of its absolute return Multi-Strategy Target Return and Target Income funds.
Pridham said: "Fund flows in 2016 show that investors are becoming increasingly astute about choosing passive funds for their core holdings and active managers where they can make a real difference, such as in specialist and less efficient markets, for reducing volatility, generating income and asset allocation.
"It makes the FCA's prejudice towards active fund management difficult to understand. Passive funds have a role but destroying confidence in active management is in nobody's interest."
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