In 2023 the UK's investment fund sector launched its lowest number of new funds in two decades.
There were 397 funds launched during the year, according to figures from Morningstar first reported by the Financial Times, down by a quarter from 2022 and less than half the number 2010's peak of 899.
This downturn coincides with a period where UK investors shifted away from funds towards the safer returns of cash products as interest rates rose.
Outflows from funds in the UK have been on a tear, with a record £50 billion withdrawn in 2022 and followed by a further £37 billion in the 10 months to October 2023, as per the Investment Association.
Asset managers face compounded pressures from falling fees, stringent regulatory costs, and increasing investor preference for passive funds.
This scenario has prompted firms like Abrdn and Jupiter to initiate significant cost-cutting measures, including layoffs and restructuring, to stabilize their businesses.