IMA UK Equity Income and IMA UK All Companies have led the way, accounting for 15 and 14 per cent of total sales, respectively. However, there has also been increased demand for IMA Asia Pacific ex Japan and IMA Global funds.
Just one fixed income sector – IMA Strategic Bond –made it into the top-10 bestsellers list. The amount invested in the asset class has fallen by a quarter from 20 per cent of total sales last year to just 15 per cent today.
Top-five bestselling sectors this ISA season
| IMA sector | % of Chelsea client ISA sales |
|---|---|
| UK Equity Income | 15 |
| UK All Companies | 14 |
| Strategic Bond | 10 |
| Asia Pacific ex Japan | 10 |
| Global | 7 |
Source: FE Analytics
Property and Absolute Return sectors have been shunned, attracting less than 1 per cent of Chelsea sales, and the Mixed Investment sectors have also struggled, attracting less than 1 per cent between them.
Equities are even more dominant when looking at individual funds. Only one bond portfolio – Invesco Perpetual Monthly Income Plus – made it into the top-10. It was second on the list.
Top-10 bestselling funds this ISA season
Source: FE Analytics
Neil Woodford’s Invesco Perpetual High Income fund was the most popular overall, followed closely by Invesco Perpetual Monthly Income Plus, Newton Asian Income and First State Asia Pacific Leaders.
With the exception of Liontrust Special Situations and AXA Framlington American Growth, all of the funds on the top-10 list have at least £1bn in assets under management (AUM).
Commenting on the results, managing director of Chelsea Darius McDermott (pictured) said: "Equities have been the real winners this ISA season. UK equity funds have remained the bestsellers, with just under 30 per cent of sales, but there has also been an increase in interest for overseas equities."
"The most interesting development has been that Europe ex UK has had more interest this year than Global Emerging Markets, with 7 per cent compared to 6 per cent."
"In addition, North American equities, which are usually greatly under-represented in the portfolios of UK investors, attracted almost 5 per cent of inflows. This follows a trend which began last year, but which has really taken hold this ISA season."
In a recent FE Trustnet interview, head of research at Chelsea Juliet Schooling-Latter called for a greater focus from private investors on US funds.
M&G Optimal Income, Schroder Income Maximiser and Kames Investment Grade Bond have all fallen out of the top-10 bestsellers list this year.
Equity funds were even more popular with Junior ISA investors. This is inevitable, given that those using these products have a longer time-horizon on average.
All five of the bestselling sectors have a pure equity focus, with IMA Global and IMA UK All Companies taking the top-two spots.
Looking at individual funds, Newton Asian Income pipped Invesco Perpetual High Income to the number-one spot in the Junior ISA list. It is one of the bestselling funds in the entire IMA unit trust and OEIC universe in the last year, according to FE inflows data, with inflows exceeding £1bn.
Performance of fund vs sector and benchmark since launch
Source: FE Analytics
Jason Pidcock’s £3.4bn fund is currently yielding 4.09 per cent.
Rathbone Global Opportunities, Marlborough Special Situations and Schroder Asian Income Maximiser also made it into the top-10 for these products.
"Parents and grandparents are also favouring overseas equities for Junior ISA investments, with more than 50 per cent of investments going into Global, Asia ex Japan and Global Emerging Markets," said McDermott.
"The majority of Junior ISAs are still being set up on behalf of older children [73 per cent] rather than newborn children, but the overall take-up rate has increased significantly in recent months."
"Applications over the last six months have been more than double those received in the preceding year," he added.