Retail investors bolstered August flows with net £1.8bn inflows compared with outflows of £565m in August 2019, with bonds remaining the best-selling asset class.
According to the latest Investment Association (IA) figures, fixed income bested all other asset classes with £1.4bn net retail sales, followed by mixed asset with £541m, while equity funds returned to positive flows, receiving £340m net inflows.
Elsewhere, other funds, including targeted absolute return, volatility managed and unclassified sectors, also received inflows of £294m over the last month of summer, while property funds experienced outflows of £3m, with money market lagging at £743m outflows.
IA Global received the greatest sector inflows, recording £705m net retail sales, while Global Bonds and Mixed Investment 40-85% followed in second and third, with £581m and £428m inflows respectively. Sterling Strategic Bond came in fourth, bringing in £316m of net retail sales, and Europe ex-UK rounded out the top five with £296m.
At the other end of the scale, Short-Term Money Market earned the title of worst-selling IA sector with £557m outflows.
Despite net institutional outflows of £2.2bn, the strong performance of retail saw total industry funds under management (FUM) stand at £1.3tn, the same figure as August 2019.
Following global equity in the top spot regionally was Europe, which saw inflows of £305m into equity funds and Asia took bronze with £220m inflows. Outflows were recorded for both Japan and North America funds, each losing £11m and £20m respectively, while UK funds haemorrhaged £748m in net retail outflows.
Responsible investment funds continued to grow, bringing in net retail sales of £897m over the course of August 2020, and now stands at £36bn in total FUM, which represents 2.7% of overall industry FUM.
Tracker funds also enjoyed a strong end to the summer, with inflows of £1.3bn bringing its total FUM to £239bn, representing 18.2% of the industry total.
Over the course of August, gross retail sales for UK fund platforms comprised nearly half of the total market share (49%) as it drew in £9bn, while gross retail sales through other UK intermediaries including IFAs received £5bn (24%) and direct gross retail sales represented 6% of market share with £1.2bn.
Chris Cummings, chief executive of the IA, said: "The last month of summer saw a cementing of saver confidence with £1.8bn put into funds throughout August, in a further bolstering of the Covid-19 fund market recovery.
"Marrying financial returns with environmental, social and governance considerations continued to be popular with investors in August. Responsible investment funds attracted almost £900 million, proving their resilience amidst ongoing economic uncertainty."
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