Funds under management reached £485bn at the end of February – an all time high. It was £13.1bn higher than in January and £143.6bn, or 46 per cent, up year-on-year.
The rise in funds takes account of strong sales as well as improvements in financial markets.
The strong level of savings also saw the ISA season get off to a strong start with net retail sales of £230m – the highest February since 2002.
It is in stark contrast to a year ago, when sales of ISAs experienced an outflow of £113m, as investors cashed in more of their savings in funds than they bought.
Meanwhile, institutional funds sales showed an outflow of £1m in February, in contrast to a net inflow of £1.1bn in 2009.
The top selling funds were pound-denominated strategic bond, absolute return-UK, global growth, cautious managed and property funds. The least popular funds were UK gilts, UK equity income, europe excluding UK, UK all companies and pound-denominated corporate bond funds.
Jane Lowe, director of markets at the IMA, said: “The year has started very strongly, with sales figures the highest on record. Funds under management are also the highest on record, beating the previous peak in October 2007. The ISA season is going well.
“The pound-denominated Strategic Bond sector accounted for the majority of net retail sales in the bond sectors, which otherwise slipped in popularity against the equity and other asset categories.”