Assets under management within fund of funds have reached a record level of £46.5bn, according to the IMA.
Net retail sales of funds of funds totalled £1.2bn, ranking as the sector's best quarter, up 61% on Q1 2009.
Cautious Managed was the best selling sector, accounting for 34% of all funds of funds net retail sales in Q1.
However, the Balanced asset class accounted for the highest proportion of total funds under management for funds of funds at 62%, while the Balanced Managed sector had 27% of all funds of funds.
In stark contrast, net retail sales of ethical funds in the first quarter were one of the lowest on record. Sales totalled £16m, significantly lower than in the previous two quarters (Q3 £59m and Q4 £62m).
However, ethical fund assets under management were the highest on record, with a total of £386m.
Elsewhere, tracker funds experienced their highest ever net outflow, £195m in Q1. This reverses the trend experienced in the last three quarters, when net retail sales for trackers were positive. However, the majority of quarters over the past five years have seen outflows.
Tracker AUM still remain at a record £29.5bn, up 59% on Q1 2009.
IMA chief executive Richard Saunders says: "In the first quarter, sales of funds of funds continued to be strong, accounting for about £1 in every £10 of gross retail sales.
"Net retail tracker fund sales slipped into negative territory again in March, after two years of increasing sales, and ethical funds were steady at just under 1% of industry gross sales. Rising markets took all three groups to record levels of funds under management."
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