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Corporate bond funds stay favoured

Investor appetite for corporate bonds remains strong approaching the second half of 2009, although inflows have started to slow. Corporate bond funds dominated the Cofunds platforms in May, accounting for a quarter of net sales.

M&G knocked its own Corporate Bond fund off the top spot with another of its fixed income offerings – Strategic Corporate Bond, also managed by Richard Woolnough. This was a reversal of the two funds’ positions in April.

Invesco Perpetual Corporate Bond, M&G Recovery, and Invesco Perpetual High Income took third, fourth and fifth places respectively.

Invesco and M&G’s combined sales accounted for 60% of total net inflows last month, owing to the ongoing popularity of corporate bonds and fixed income.

Russell Lancaster, the director of fund manager relations at Cofunds, says despite the enduring popularity of these funds, inflows are slowing from their peak in the first quarter of this year.

He also says the monthly sales figures show a corresponding gain in sales of Cautious Managed and Balanced funds, suggesting the start of a move away from corporate bond funds.

Meanwhile, regional equity and emerging market funds began creeping into the top 50 best-seller list, with Lancaster highlighting the resurgence of Asia Pacific, Bric (Brazil, Russia, India and China) and Japan funds.

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