Sales of Global Growth funds on Cofunds hit a record high in January as advisers turn to equities for income at the expense of bond funds.
Global growth powered to an all-time high of 12% of net sales on the platform in January - a significant jump from its Q4 figure of 7% - with UK All Companies and Absolute Return also benefiting from the shift back into equities.
Michelle Woodburn, manager of fund group relations at Cofunds, says the current trend for equities is accompanied by a move to income-generating funds at the expense of the Corporate Bond and Strategic Bond sectors.
"In general, there is a big income theme emerging and the separation of equity and income is becoming increasingly hazy with M&G taking the line they are not mutually exclusive," she says. "Companies producing good dividends have also demonstrated the ability to grow."
The highest selling equity fund within Global Growth was M&G Global Basics, grabbing 13th spot in the net sales chart.
Key funds within Global Growth as a whole were all income-producing, with Newton Global Higher Income the top performing fund in the sector, finishing in seventh spot. Stuart Rhodes' M&G Global Dividend claimed twelfth position in the monthly sales table.
Out of the top twenty best selling funds on Cofunds during the month, eleven were income generating funds, spread over several sectors including Global Growth and Cautious Managed.
Corporate Bond was a major casualty of the shift in advisers' focus from bonds to equities, with net sales of -6% in January.
"This sector is haemorrhaging massively," says Woodburn. "No Corporate Bond funds are in the top 50 funds."
Strategic Bond - a big theme from last year as the sector profited from the falling popularity of Corporate Bond - also suffered from the migration to equities. Its share of the spoils fell from an average of 11% in 2010 to just 5% in January.
Also benefiting from the move away from bonds was UK All Companies, with 5% of net sales in the month - a significant improvement for a sector almost in outflow at the tail-end of last year.
Meanwhile, Cautious Managed continued its dominant showing with the sector again top of the table with a third of all net sales. Jupiter Merlin Income Portfolio and Thames River Distribution helped prop up the sector.
Elsewhere, Absolute Return - a sector the IMA is considering splitting - continued its strong showing with its 9% of net sales driving it to third position. For 2010 as a whole, the sector managed around 7% of sales.
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