The sector represented 21 per cent of gross retail sales of UK domiciled funds in March with 88 per cent sold through intermediaries.
Of the £1.7bn net retail sales, £1bn was invested in bond funds, followed by £445m in equity funds.
Funds under management of UK domiciled investment funds were up 2 per cent to £347.9bn in March from £340.2bn a month earlier.
UK domiciled Isa funds under management of £67.9bn were 2 per cent lower than February’s £66.8bn while net sales were £321m, an increase from last month’s outflow of £112.5m.
The 2008/09 Isa season which runs from March 1 to April 5 saw net inflows of £529.1m, 74 per cent more than the previous tax year season’s inflow of £303.8m.
Overseas funds under management were £15.3bn in March, a 4 per cent increase on February’s figure of £14.7bn.
IMA chief executive Richard Saunders says: “This year’s Isa season saw significantly greater net investment than 2008. At the same time the strong inflows into bond funds of the last few months have been maintained. As a result, net retail sales for March were the highest they have been since April 2007.”