Tracker funds roared back into popularity in Q1 this year, posting a £64.3m inflow after six straight quarters of outflows.
The latest IMA figures show retail tracker fund sales bounced back from a £59.6m outflow in Q4 2007 and the £4.9m outflow recorded in Q1 last year.
However, tracker funds under management in Q1 fell 10% on the pervious quarter, to £24.5bn, which is also 7% down on the corresponding period last year.
Total net fund of funds sales also fell to £637.3m in Q1 this year, down from £834m recorded in the previous quarter and lower than the £821.1m posted in Q1 2007.
The most popular fund of funds sector in Q1 was Cautious Managed, accounting for £238.3m net inflows.
Funds under management in fund of funds at the end of Q1 2008 reached £32.6bn, up 8% on the corresponding period last year, but lower than the £34.2bn at the end Q4 2007.
Retail ethical fund sales were also lower in Q1, to £27.6m. The figure is down on the £99.7m inflow the previous quarter and the £99.8m seen in Q1 2007.
Ethical funds under management hit £5.4bn in Q1, down on the £5.9bn at the end of 2007.
"Tracker funds saw a positive quarterly inflow, with a good month in March 2008, after six previous quarters of outflows," IMA director of markets Jane Lowe says.
“This may reflect the cautious improvement in overall net retail sales of funds seen during February and March 2008.
“Investment in funds of funds has remained positive throughout, and although funds under management were down on the last quarter they remain ahead of the same quarter in 2007."IFAonline
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