The cautious managed sector came closer to challenging corporate bonds for the top spot in third-quarter fund sales, according to figures from Cofunds.
Corporate bonds accounted for the highest proportion of net sales in Q3 at 26 per cent but the cautious managed sector was close behind with 21 per cent.
September saw corporate bond funds knocked off the top selling spot for the first time in a year by the cautious managed sector.
Cofunds says net and gross sales in global emerging markets and the property sector have also picked up.
Business development manager Michelle Woodburn says: “The cautious managed sector returning to favour is what we would typically expect to see and is a sign of markets returning to normality.
“Looking to the fourth quarter, although we expect corporate bonds will continue to do well, cautious managed is likely to gain in popularity again, as diversified sectors are known to perform well in difficult climates.
“With signs of recovery appearing, we also expect to see advisers opting for slightly higher-risk funds.”
Whitechurch Securities managing director Gavin Haynes says: “It is a sign that we are seeing more interest in equity markets. Quite a significant part of the cautious managed sector is distribution funds and multi-asset funds, so rather than just looking at fixed interest, they are beginning to see more scope in equities.”