AIM-listed fund manager Premier Milton said demand for UK equities remained weak as it reported a slight decrease in assets under management (AUM).
In a trading update covering the third quarter, Premier Milton reported that its AUM stood at £10.6bn at the end of June.
This was down from £10.7bn at the beginning of the quarter, but eight per cent higher than at the start of the financial year partly thanks to the acquisition of Tellworth Investments.
In the past three months, the firm reported net outflows from its equity funds and multi-asset funds, which more than offset demand for its fixed-income funds.
Mike O’Shea, chief executive, commented: “It is pleasing to note that we have seen continued demand for our fixed income funds as well as a more recent improvement in the flow position for our international equity funds.”
“Demand for UK equities remains subdued despite the strong relative performance of the asset class,” he said.
UK equities have been an unpopular asset for years, with investors staying clear despite its relative value. UK equity funds suffered their worst month on record in May, with retail investors pulling £1.8bn from the sector. According to the Investment Association, £13.6bn has been withdrawn in the last year alone.
O’Shea also drew attention to the “weak environment” for multi-assets despite the firm’s “long-term performance” in this area.
“Falling interest rates are likely to be the catalyst for an improvement in fund sales more generally and we expect that rates will start to decline as we move through the latter half of 2024 and into 2025,” he said.
“We remain confident that our clear proposition in active management and our belief in the potential of mid-sized and smaller companies to deliver significant long-term outperformance over index strategies, alongside our diversified product range and powerful distribution capabilities will allow the Group to perform well for our clients and our shareholders as this occurs,” O’Shea concluded.
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