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£542M flows into booming bond sectors

Fund business hits £1.1bn in February

Over half a billion pounds was invested across the leading bond sectors in February, according to figures from the Investment Management Association.

The IMA corporate bond sector was the biggest seller for the second successive month, with £254m of net retail sales. The figure is down on £303m in January but well above the monthly average of £77m in the past 12 months.

Strategic bonds and global bonds are the second and third-best selling sectors, with net retail sales of £148m and £140m respectively.

The global equity income sector was the fourth-best seller in February, with £131m. The mixed investment 40-85 per cent shares sector is fifth, with £127m.

The IMA North American sector also saw strong inflows as the ninth-best seller with £104m, its best return since March 2011. UK all companies is the worst-selling sector, with outflows of £250m.

The flexible investment and Europe excluding UK sectors, saw outflows of £189m and £139m respectively.

There was a total of £1.1bn of net retail sales in February, the highest level since August 2011, bringing the total of funds under management to £615.4bn.

Fixed income is the leading asset class, with £553m in February while equities saw £249m of net retail sales. Mixed assets fell to £123m, the sector’s lowest monthly return since March 2009.

Hargreaves Lansdown senior analyst Meera Patel says: “It is not a surprise to see bonds going well after the longterm refinancing option was passed late in 2011. UK corporate bonds will continue to do well but I think that as sentiment improves and risk appetite comes back, other sectors will come to the fore.”

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