UK investors' billions push funds to record year
UK retail investors have put a record £19bn (€21bn) into investment funds so far this year, according to the Investment Management Association, providing a boost to asset managers, which derive higher profits from retail assets than equivalent amounts of institutional money.
Retail investors placed a net £2.7bn into funds in September, bringing the total over nine months to £18.7bn. In 2000, net retail sales hit £17.7bn, according to the IMA: 2009 would only fail to be a record year if investors withdrew substantial amounts of money from their funds before the end of December.
Over the first nine months of the year, investors have overwhelmingly favoured corporate bonds, but the latest figures revealed a shift in investors' attitudes towards the asset class. The statistics showed that UK investors placed a net £442m in absolute return funds in September, pushing the corporate bond sector into second place with £324m of net flows.
Before September, corporate bond funds had taken in the most money, net of outflows, for 10 months straight.
M&G Investments, the funds arm of UK insurer Prudential, has been one of the main beneficiary of investors’ enthusiasm for corporate bond funds: yesterday it said retail investors placed a net £5.7bn into its retail funds over the first nine months of the year. Over three quarters of its net retail inflows went into the company’s bond funds.
The third most popular funds last month were those that invested in property. They reported net inflows of £261m, the highest since June 2007, which coincided with the downturn of the UK commercial property market.
Overall, total flows into all types of equities funds overtook flows into bond strategies in September. Investors placed a net £995m in equities funds compared with £566m in bond portfolios.
The September figures mean that the third quarter was the first time since 2007 that quarterly sales for equities, at £2.4bn, beat bonds, at £2.1bn.
--Write to Phil Craig at pcraig@efinancialnews.com
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