Fixed Income Funds have dominated fund sales in July as the IMA revealed that over fifty percent of investments into funds went into the Fixed Income variety.
A total of £903m net retail sales were recorded in terms of funds, with fixed income funds accounting for over half that figure.
Richard Saunders, IMA Chief Executive, said:
“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.
“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. This is perhaps not surprising in view of economic news, but the figures are nonetheless striking.”
Ian Spreadbury, portfolio manager of Fidelity Strategic Bond Fund, added that low interest rates are proving to be key driver for investment into fixed income funds:
“The sheer weight of money flowing into corporate bonds has led to impressive returns so far this year. In this low interest rate environment, those assets that offer any reasonably sustainable yield will continue to be in demand and non-financial investment grade corporate bonds still fit the bill.”