Sterling corporate bond fund sell-off continues

Sterling corporate bond funds were the worst selling IMA sector for August 2013, while UK gilt holdings were down £27m and UK index-linked gilts were down by £15.8m. But Strategic Bond funds, which most analysts now prefer because they are more flexible, were the third best selling with £25m net sales for the year so far, and retail investors funnelled £50.7m into Global Bond funds.

And equity continued as the best-selling asset class for the fifth successive month, with net retail sales of over £1bn and £732bn under management in equity funds.

The best-selling sectors were mixed investment 20-60 per cent shares (up £272m), UK Equity income (up £225.1m) and Europe excluding UK (up £190m). And Asia was the only equity region that saw an overall outflow of money, as investors took back £105m in August.

Jason Hollands, head of business development at Bestinvest, says the spike in mixed investment 20-60 per cent shares is a reflection of the fact that many firms of advisers are now funnelling their clients into multi-manager and multi-asset funds as their core investment solution.

Overall, investor confidence remains high as August was a strong month for sales, with £1.8bn of new money invested during the month. It shows people were still investing despite it being a holiday month, and despite fears about a potential military campaign against Syria. Although this is slightly lower than July it is well above the 12-month rolling average.

Daniel Godfrey, IMA chief executive, said: "Equity funds were again favoured by retail investors – it has been the best-selling asset class for five months in a row. Mixed asset, property and targeted absolute-return funds also did well in August."

Top selling IMA sectors in August