The figure fell to £653.3m from £1.54bn in April although it was up from £317m in February and £409m in March. It compares with net retail sales of £1.1bn in May 2007.
Bond funds saw net retail sales of £366m in May while equity funds had net retail outflows of £156m.
The specialist sector saw the biggest net inflow of retail sales at £212.7m, of which £83.1m came through commodity funds and £56.9m through property funds.
The UK all companies sector saw the biggest net retail outflow at £374.8m.
Net institutional outflows from equity funds were £768m in May while bond funds saw net institutional sales of £206m.
Total UK funds under management stand at £453.7bn, a small rise from April’s £450.6bn but down from £471.6bn in May 2007.
Chief executive Richard Saunders says: “May saw respectable levels of new retail investment after the recovery in April but sales are still well below the levels of 2007 and investors continue to remain cautious in their choice of asset class.”