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Best sales in 10 years see equities top bonds

Equities replaced bonds as the most popular asset class among investors last year, attracting net retail sales of £7.5bn, according to statistics from the Investment Management Association.

In 2009, bonds topped the asset class rankings but the IMA says sales of equity funds in 2010 were at their highest level since 2000. Net retail sales of bond funds slipped from £9.9bn in 2009 to £7bn in 2010.

In sector terms, with net retail sales totalling £2.7bn, the strategic bond market was the most popular group in 2010, up from third place in 2009 after sales of £2bn.

The global bond sector leapt by 11 places from 13th in 2009, when it had sales of £900,000, to second after a rise of nearly 170 per cent to net retail sales of £2.4bn.

The least popular sector in 2010 was Europe excluding UK, which saw net outflows of £814.4m.

UK all companies, UK equity bond income, money market and Europe including UK make up the rest of the five least popular sectors.

Net retail fund sales overall totalled £23.9bn in 2010, down on 2009’s record total of £25.9bn but it was still the second-highest year for fund business.

Isa sales in 2010 had their best year since 2001, with net retail sales of £3.9bn.

Chelsea Financial Services managing director Darius McDermott says: “Equities will stay in favour as interest rates will only rise and, with inflation also high, that is bad for bonds.”

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