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Retail fund sales set to smash through the £25bn mark in record-setting year

Steve Dinneen
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RETAIL fund sales are expected to top £25bn in a year for the first time ever.

Figures to be released by the Investment Management Association tomorrow will set a new record for sales. The industry surpassed the previous record sales of £17.7bn – set in 2000 – as far back as September, when sales reached £18.7bn.

November 2009 saw net retail sales of £2.4bn – which brought the total for January to November last year to £23.6bn.

If the trend continues, full year results will see total investments into funds exceed £25bn. This is a staggering 41 per cent above the record set in 2000 and smashes through the £3.8bn recorded for the whole of last year. The last eight months have seen inflows into funds in excess of £2bn a month.

The massive growth in the retail fund sector is largely down to low interest rates meaning investors get almost no return on cash.

Last year the most popular retail sectors were corporate bonds, at £1.5bn, absolute return funds at £1.38bn and global growth at £949bn. The worst selling sectors were Europe excluding and UK all companies.

Richard Saunders, chief executive of the Investment Management Association said: “2009 has seen a remarkable turnaround in investor behaviour, whether in response to the recession or because of low returns available elsewhere.

“Investors have for most of the year been adding to their portfolios at a rate of around £2bn a month in total. What is more they have been doing so across a broad spread of asset classes.”