UK retail investors pulled a record amount from fixed income funds last month as yields spiked on fears of an end to US QE, latest IMA figures reveal.
Net retail fixed income outflows of £624m, the highest since IMA records began in 1992, saw £ Corporate Bond, Global Bonds and £ Strategic Bond rank as the three worst-selling sectors.
The outflows saw "may have been a response to anxieties about future tapering by the Fed and other central banks", according to IMA director of public policy Jonathan Lipkin.
Equity sales of £884m accounted for the vast majority of the £1.1bn in total net retail sales seen in June, with UK equity funds enjoying their best month in almost seven years.
UK equity funds were the best-selling regional equity funds in June, with net retail inflows of £479m, the highest since October 2006. Total Q2 flows of £857m represent the highest quarterly figure since Q4 2006.
Every fund in the £ Strategic Bond and £ Corporate Bond sectors lost money in the month to 20 June, according to Morningstar data, as concerns of a slowdown in the scale of the Federal Reserve's asset purchases hit fixed income prices.
But the sell-off in fixed income may have abated this month, if pan-European figures translate into UK retail flows.
High yield credit flows totalled $2.3bn in the week to 17 July, according to Bank of America Merrill Lynch - the highest amount in dollar terms on record - and almost half of the $9.7bn June outflow from high yield funds has now reversed.
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