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Bank of England rate rise fails to stem bond fund inflows

Fixed income was the most popular asset class for UK investors in November despite the Bank of England raising interest rates and stock markets remaining buoyant, Investment Association figures show.

Fixed income attracted over £2bn worth of sales in the month, while mixed asset and equity were the second and third most popular assets classes, attracting £1.2bn and £713m respectively.

Total funds under management across the industry were £1.2trn.

Investment Uncovered: ‘A golden age for bonds’

IA fund market specialist Alastair Wainwright says it was the sixth month in a row fixed income topped the sales charts.

“UK investors preferred fixed income funds in November, despite the Bank of England raising base rates by 0.25 per cent.” Wainwright says Sterling Strategic Bond was the best-selling sector with £1.5bn of new retail money.

When it comes to equity, UK-focussed funds continue to suffer with £188m net outflows in November, in contrast to the top-selling region, Europe, which enjoyed £348m inflows. Europe ex-UK funds attracted £291m.

Asia funds were the next best-selling with net retail sales of £229m, followed by £213m that went into Japan. Global funds were the only other regional equity fund besides the UK to suffer net outflows, albeit only £4m.

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