Retail funds smash £25bn yearly record

Steve Dinneen
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RETAIL fund sales smashed through the £25bn-in-a-year barrier for the first time last year, the Investment

Management Association (IMA) revealed yesterday. The record figure was spurred by investors looking for alternatives to holding cash.

The best selling funds for the year were corporate bonds. They topped the table for eight months of the year, with total net sales of £6bn for the year. Nearly £1 in every £4 invested in funds last year went to this sector.

Absolute bonds was the second best selling fund and was the most popular in both September and December. Total net sales for the year were £2.5bn – approximately 10 per cent of total funds.

Strategic bonds came third with £1.96bn in sales. Property showed the biggest year-on-year swing. It rallied from a net loss of £470,000 in 2008 to sales of £1.64bn last year. The fund had a slow start to the year but was the top selling fund in October and November and was only narrowly pipped by absolute returns in December.

The previous highest full-year net retail sales were of £17.7bn back in 2000. But this was surpassed in September 2009 when sales reached £18.7bn. Total funds under management last year reached £480.8bn.

IMA chief executive Dick Saunders said: “2009 has seen a remarkable turnaround in investor behaviour. They have for most of the year been adding to their portfolios at a rate of around £2bn a month.”