The assets of the retail funds business at Royal London dropped by £9.6bn in the first six months of 2023.
A representaive of Royal London told FTAdviser the outflow from the retail business were mostly a function of mandates moving to the institutional business.
The representative said: "We have seen some movement of assets between different Royal London Asset Management funds, with a significant proportion of these flows being the result of internal client portfolio restructuring. We continue to see strong interest in our products across a wide variety of different types of investors, resulting in strong flows over the course of the first half of the year, and remain committed to providing our clients with a broad range of best-in-class solutions that can meet both their shorter- and longer-term needs.”
Of that £9.6bn, which equates to around £360mn a week, just over £1.2bn came as a result of outflows from the Royal London UK Core Equity Tilt fund. The fund is still £5.7bn in size.
That fund has outperformed the UK All Companies sector over the past five years, but outflows from UK equity funds in general have been high, with over £6bn withdrawn from large cap funds since the start of the year.
The UK equity exposure has hurt the firm in other areas, its Large Cap UK equity fund has shrunk by about £500mn over the past 12 months.
Despite the outflows, Royal London continues to be one of the largest fund groups in the UK market, with assets under management of £62bn, which includes assets from the wider Royal London insurance business.
The assets under management of the company a year ago were £68bn. The drop of about £6bn reflects both outflows and the impact of negative market movements.
The outflows can be seen in the context of wider outflows from open-ended funds in 2023, where over £6bn has been withdrawn from equities, while bonds have had net inflows of £2.3bn.
Edinburgh-based fund house Baillie Gifford has had outflows of £4bn this year to date from its open ended fund business.
david.thorpe@ft.com
