Net retail sales for June were only £140m compared to £748m in June 2008, with the biggest net inflow into the ‘other' category, driven by absolute return funds.
According to IMA data, the Absolute Return sector was the most popular UK domiciled net retail sector with inflows of £214m. These multi-asset funds have proved popular with investors in volatile markets as they are designed to offer protection when markets fall.
Unsurprisingly, the sector with the biggest net retail outflows in June 2008 was the UK All Companies sector on £164.7m. Equity funds as a whole recorded outflows of £371m while the month was also weaker for property funds with outflows of £14m. However, balanced funds managed inflows of £126m.
Institutional holdings of unit trusts and OEICs saw overall outflows of £503m. This included a £658m outflow from money market funds and a £450m inflow into bond funds.
Funds under management of UK domiciled investment funds were £425.2bn in June 2008, 6% lower than the previous month and 9% lower than June 2007.
Meanwhile, UK domiciled ISA funds under management at £87.8bn were 6% down compared to the previous month and the same month the previous year. Net sales of UK domiciled investment fund ISAs saw outflows of £209.9m in June 2008, compared to outflows of £198.3m the previous month and outflows of £174.7m in June 2007.
The most popular UK domiciled ISA sector in June 2008 was UK All Companies, accounting for 19% of gross ISA sales. In net terms the most popular ISA sector was Cautious Managed.
The IMA revealed overseas funds under management were £16.2bn in June 2008, a 6% decrease from the previous month, while overseas ISA assets of £304m fell 13% from May 2008. Net retail sales of overseas domiciled funds in June 2008 saw outflows of £164.7m and net retail sales of overseas domiciled investment fund ISAs saw outflows of £1.9m in June 2008, compared to outflows of £0.1m in May 2008.
Richard Saunders, chief executive of the IMA commented: "Net retail sales of both onshore and offshore funds returned in June to the subdued levels of earlier in the year. The exception was the new absolute return sector, which saw inflows of over £200m and now stands above £2bn. Taken with the continued outflows from equity funds, this clearly demonstrates the limited risk appetite of investors at the moment."IFAonline
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