Bond funds dominate net sales in July despite FSA probe

Bond funds took £480m of the £903m invested into funds last month by retail investors, the IMA data reveals.

The Corporate Bond fund sector was the best-selling sector, taking £218m, while ensuring bond funds topped the best-seller list for the eighth consecutive month.

Inflows come despite the news that the FSA sent letters to fund houses last month requesting reports on whether their corporate bond funds could meet redemption demands, amid liquidity concerns in the fixed income market.

Bond fund liquidity is currently a key focus for investors, with M&G recently moving to stem inflows into Richard Woolnough's £6.3bn Corporate Bond and £5bn Strategic Corporate Bond funds, following continued investor interest.

Strategic bond and global bond funds also remain in vogue according to the IMA figures, with net retail sales of £109m and £103m respectively.

Away from fixed interest the Mixed Investment 20-60% Shares sector was also popular, taking in £203m of new business. Global Equity Income was in fifth place, gathering £102m of new net sales.

Meanwhile, Europe remains rooted to the bottom of the sales table, posting a £166m decline in new business in July.

Richard Saunders (pictured), chief executive at the IMA, said while investment into equities remains neutral, investors are displaying greater appetite for global equity income products.

"The latest month shows a similar picture to previous months this year, with net retail sales around the £1 billion mark and a continued preference for bond funds and mixed funds," said Saunders.

"Investment in equity funds continues overall to be broadly neutral, but our analysis of net retail sales over the last 12 months shows an interesting pattern of investor preferences shifting towards global funds at the expense of the UK, North America and, especially, Europe."

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Fixed Income
• IMA
• fixed income