Tracker fund sales reach record high in 2011, reports IMA

The Investment Management Association has revealed that tracker fund sales reached a record high in 2011, accounting for 8 per cent of total equity fund sales.

The IMA reports that net retail sales of tracker funds reached £1.9 billion in 2011 despite fourth quarter sales of £341m, the lowest level since the first quarter of 2010.

IMA chief executive Richard Saunders says: “2011 was a successful year for tracker funds, which saw their highest net retail sales on record.

“Funds tracking equity indices accounted for 8 per cent of total equity fund sales, the highest level since 2003.”

Total tracker funds under management rose to more than £39 billion in 2011, £699m more than in 2010.

Fund of funds reached their highest share of total funds under management since records began reaching £60.2 billion in 2011. By the end of 2011, fund of funds accounted for 10.5 per cent of all funds under management.

Saunders adds: “Investors added £5.2 billion of funds of funds to their portfolios in 2011. In gross sales terms, £1 in every £9 invested in funds was invested in funds of funds.

“Funds of funds also saw their highest ever share of total funds under management, over 10 per cent at the end of 2011”, he says.

The best selling sector in 2011 for fund of funds was the cautious managed, attracting inflows of £1.4 billion, it was followed by the balanced managed and £ strategic bond sectors with £745m and £341m, respectively.

Ethical funds also reported net sales of £201m in 2011.