Collective Investments - UK - July 2013
“A large number of UK retail investors are simply unprepared to put their money at risk by investing in equities. Given that a larger number of people save for emergencies and unexpected events, rather than to generate an income, most adults will always be wary of using products outside the traditional savings accounts and cash ISAs.”
– Stevan Obradovic, Financial Services Analyst
Some questions answered in this report include:
- Why are investors shunning equity-based products?
- How many adults are considering investing in collective funds in the next 12 months?
- What are consumers’ main saving and investing goals?
- Do investors look for passive or active fund management?
Despite economic uncertainty and market volatility, the collective investment fund market has performed relatively well. Indeed, gross sales of unit trusts and OEICs actually increased marginally during 2012. However, global economic woes continue to test even the most seasoned investors, and as a result the prevailing attitude among UK consumers is one of caution.
Long-term prospects for the industry are positive, however, much of this will depend on economic improvements and a resolution to the eurozone debt crisis. One area where collective investment fund providers can actually exert an influence is to change consumer attitudes towards equity-based investing. At present, the majority of UK consumers are still not prepared to take risks with their savings and tend to overlook products such as collective investment funds. The onus is on the industry to educate consumers how easy it can be to purchase these products, and how over the long term, these investments will almost certainly outperform risk-free savings accounts and cash ISAs.
This report examines the market for collective investment funds, with analysis focused on some of the key developments in this sector including the impact of economic and regulatory challenges. This report also provides a market size breakdown, while considering the future prospects of gross retail sales of unit trusts and OEICs. The report concludes with Mintel’s exclusively commissioned research looking at product ownership, influential factors when choosing collectives and general attitudes towards saving and investing.
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