Fund buyers switch to smaller funds as large vehicles underwhelm

A concentration of flows among an increasingly small pool of funds is prompting buyers to turn away from the biggest players due to fears over performance, liquidity and communication.

Figures from the IMA for 2012 show the top ten funds in the UK accounted for 21% of gross sales in 2012, the most recent year for which data is available. That strong growth may well have continued again in 2013, given the contraction in the size of many buy lists and advisers who increasingly opt to outsource investment operations. Nonetheless, some fund buyers are now beginning to shy away from the industry’s largest offerings, pointing to a variety of issues. Chris Metcalfe, managing director of outsourced investment firm IBOSS, said he has increasing concerns over some bigger p...