A volatile year for financial markets has seen the launch of 1,477 new UCITS and ETF vehicles available to UK investors, representing £970bn in AUM, outpacing the number of closures seen over 2020.
Investment Week analysis of Morningstar data shows a total of 1,014 liquidations or mergers of funds available in the UK market over 2020, representing £438.9bn in AUM, across 1,006 UCITS vehicles and eight ETFs.
There have been 838 vehicles liquidated and 149 merged overall, 489 of which were equities funds, while fixed income, allocation vehicles and alternatives saw 238, 134 and 129 closures respectively.
Allianz GIobal Investors and Ninety One saw the largest share of liquidations and mergers, with 80 and 49 respectively.
The bulk of closures were domiciled in Luxembourg, with 519 liquidations or mergers, followed by Ireland and the UK with 300 and 169 respectively.
With regard to launches, 1,388 were UCITS while 89 were ETFs. Equities were by far the most common asset class for launches at 715, followed by 437 for fixed income and 169 for allocation.
BlackRock launched 43 funds, and an additional 17 though its iShares business, while Schroders and Fidelity were the second and third most active with respect to launches with 56 and 54 respectively.
Luxembourg was the most popular domicile with 718 launches, followed by Ireland with 449 and the UK with 299. France saw 18 launches.
Commenting on the data, senior manager research analyst for passive strategies at Morningstar Kenneth Lamont said: “The disparity in number of ETF launches versus number of closures is a testament to the growth of the ETF market. The relatively small ETF graveyard is mostly populated with Comstage funds which have been shuttered following Comstage’s acquisition by French ETF Provider Lyxor.
“In terms of launches for a UK audience, ESG has been the story of the year with almost half of new funds carrying a sustainable mandate. Within that grouping, those with a specific climate related focus feature heavily.
“Another new launch which caught the headlines this year is the swap-based S&P 500 ETF launched by iShares. The introduction stirred controversy because of iShares vocal stance against synthetically replicated funds going back many years. Either way, the tax advantages of going synthetic for this particularly exposure are clear, and entering the area was a pragmatic move.”