Vanguard outpaces rivals in platform sales in 2019
Gross sales of £3.9bn double that of nearest rivals
Vanguard has topped the tables in Fundscape's latest Platform Report, with double the sales of its closest rivals Legal & General and BlackRock, as it benefited from the model portfolio trend and use of trackers in portfolios.
According to Fundscape, in Q4 2019 Vanguard's gross sales on platforms hit £3.9bn, while Legal & General and BlackRock managed £2bn respectively.
The top ten fund groups by gross and net sales included a "heavy sprinkling" of groups with both active and passive fund ranges, Fundscape noted, with Vanguard topping the table for net sales in Q4 with £1.9bn - ahead of HSBC second place with net sales of £895m.
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The report, which includes 19 platforms in its analysis, found that boutiques Lindsell Train and Fundsmith were able to compete with larger generalists as their global funds attracted "robust" sales, despite performance tailing off in the second half of the year.
Among the top ten groups on platform by gross sales in 2019, Lindsell Train came in at seventh place with £4bn, only just behind Royal London's £4.3bn.
Vanguard also had at least four funds in the top ten best-selling funds list, with Vanguard Life Strategy 60% Equity coming second in the top ten funds on platform by gross sales in 2019 at £2.2bn, behind Lindsell Train Global Equity which managed gross sales of £2.4bn.
But it nudged ahead of the Lindsell Train Global Equity fund by net sales for the year, with Vanguard Life Strategy 60% Equity clocking up £1.5bn, just ahead of its £1.4bn.
The latest Platform Report showed that passive funds dominated the market in Q4 2019, with eight out of the top ten funds by net sales being passive, including Vanguard US Government Bond Index and HSBC American Index.
The only two active funds in the top ten are the Baillie Gifford American and Royal London Sustainable Leaders funds.
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Bella Caridade-Ferreira, CEO of Fundscape said demand for passive funds has grown "exponentially".
"The regulator, advisers and investors are focused on value for money and that is driving down fees and pushing up demand for trackers," she said.
"In 2019 trackers accounted for 40% of sales, but their market share rocketed to 52% in the fourth quarter. We expect that trend to continue in 2020 - unless, of course, there is a significant stockmarket correction."
Caridade-Ferreira also predicted a "bumper" Isa season in 2020, after last year's was hit by the 31 March Brexit deadline.
The report also showed that despite Brexit, geopolitical concerns and the fallout from Woodford making 2019 a "tough year" for fund groups, gross fund sales via platforms in the last quarter rose to £34bn and net sales £9bn, bringing yearly totals to £112bn and £36bn respectively.
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