Investment company purchases by advisers via platforms hit a record £1,298m in 2021, an increase of 23% on 2020.

Figures compiled by ISS Financial Clarity for the Association of Investment Companies (AIC) reveal that investment company sales surged last year.

In the fourth quarter of 2021, purchases amounted to £334m, the second highest quarterly total on record. The top quarter for purchases was the first quarter of 2021 at £384m.

Net demand for investment companies on adviser platforms (purchases minus sales) was £320 million in 2021, an increase of 29% on 2020.

The number of firms purchasing investment companies averaged 2,028 across the four quarters of 2021, compared to an average of 1,516 firms using investment companies in 2020, up 34% year on year.

Measured by purchases, the most popular investment company sectors in 2021 were Global (17% of all purchases of investment companies on adviser platforms), Flexible Investment (8%), Infrastructure (6%), UK Equity Income (6%), Global Smaller Companies (4%) and UK Smaller Companies (4%).

In terms of net demand, the top sector in 2021 was Flexible Investment, followed by Property – UK Logistics, Infrastructure, Global Smaller Companies, Asia Pacific and Global.

In the fourth quarter of the year, the Property – UK Logistics sector saw the highest net demand. The VCT Generalist sector, which rarely features among the top sectors for net demand, jumped to fourth place.

Transact accounted for 45% of purchases in 2021, and 51% in the fourth quarter. Apart from Transact, the major platforms for investment company purchases were Raymond James, FundsNetwork, Ascentric, 7IM and Quilter Wealth Solutions. Together, these top six platforms accounted for 93% of investment company purchases.

Nick Britton, head of intermediary communications at the Association of Investment Companies (AIC), said: “Last year set new records both for investment company purchases on adviser platforms, and the number of firms buying investment companies on those platforms.

“Our Flexible Investment sector, which is home to investment companies focused on multi-asset investing and capital preservation, saw particularly strong demand in a year that was marked by continuing uncertainty over the Covid-19 pandemic. It’s encouraging that venture capital trusts featured among the top sectors by net demand in the final quarter of the year, indicating growing interest in trading VCT shares on platforms.”