Tuesday 20 August 2024 11:11 am

Vanguard: Asset manager soars to second most popular UK retail investor pick

By: Elliot Gulliver-Needham

Vanguard has jumped to become the second most popular asset manager among UK retail investors for the first time.

While American passive manager Blackrock has long dominated the number one spot for net sales among UK retail investors, this is rival Vanguard’s first time in the quarterly Pridham Report.

Vanguard brought in £1.6bn in net sales from retail investors in the second quarter of 2024, with the firm’s flagship £42bn multi-asset LifeStrategy fund range boosting its success.

The American fund manager had pushed out HSBC Asset Management for the second place spot after it brought in £1.7bn last quarter.

This quarter, HSBC slipped slightly throughout down to £1.5bn.

However, Blackrock retained the top spot in net sales, though this was down significantly from the £3.9bn it achieved last quarter.

The asset manager’s gross sales also fell, though by a less severe amount, from £10.1bn to £9.3bn. To compare, Vanguard’s gross sales sat at £7.2bn.

Despite the troubles for Blackrock, 43 per cent of the largest fund groups in the UK registered positive retail net flows during the quarter, the largest proportion since the third quarter of 2021, with the number hitting a low of 21 per cent in the last quarter of 2023.

Overall, passive equity funds from houses like Vanguard and Blackrock led the way on positive flow activity, selling over £5bn in total.

Benjamin Reed-Hurwitz, EMEA research leader at ISS MI, said: “There is a sense of guarded optimism among fund groups at the end of the second quarter. Inflows were steady and there has been a slowdown in outflows among the UK’s largest fund groups, suggesting that investor confidence is improving.”

“Whether that trend continues in Q3 remains to be seen, especially considering the severe market volatility we have witnessed in recent weeks. However, in the past investors have been drawn to equities when interest rates are falling, as they have begun to in Europe and, perhaps, soon in the U.S., too. That may well provide the conditions needed to carry that momentum through to the end of the year.”