Flows turn against absolute return
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Absolute return funds have witnessed their biggest outflows for the last three years, according to the latest figures from the Investment Management Association.
The IMA absolute return UK sector was hit by net retail outflows of £122m during August.
This is the biggest outflow since the sector was formed in April 2008 and compares with an average monthly inflow of £162m for the past year.
The sector has faced criticism in recent months. Fitch Ratings and Standard & Poor’s Fund Services claimed that many absolute return funds have failed to meet their targets while there is evidence that some investors are confused over the definition of the term.
August was the highest-selling month on record for the IMA global sector, according to the association’s figures.
Net retail sales of global equity funds hit £337m, which is a new record despite being only marginally ahead of the £332m reported for June. The sector has sold £1.8bn in the year to date.
IMA UK equity income was the second most popular sector during August, achieving net retail sales of £211m - its highest since May 2007.
IMA cautious managed came third with net sales of £198m and IMA balanced managed was fourth with £156m.
Hargreaves Lansdown investment manager Ben Yearsley says: “The outflows in absolute returns may be down to people seeing markets bottoming and opportunities appearing elsewhere.”
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