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Corporate bonds lead buoyant fund sales

Fixed income was the bestselling asset class for the eighth consecutive month in April, with almost £600m in net retail sales, according to the Investment Management Association.

IMA figures show the corporate bond sector was the biggest-selling sector in April, with £277m of net retail sales, over double the monthly inflow average of £136m for the sector in the past 12 months.

The bond sector has been the top seller for the past five months. The corporate bond sector has now been the bestselling sector in three of the first four months in 2012, with strategic bonds leading the sales league in March.

The mixed investments sector 20-60 per cent and the strategic bond sector were the second and third best-sellers, with £258m and £250m of net retail sales respectively.

The UK equity income sector rose to become the fourthbest-selling IMA sector in April with net retail sales of £136m, more than double its monthly average of £62m for the previous 12 months. The global emerging market sector stayed in fifth place with net retail sales of £156m.

Europe excluding UK was the worst-selling sector, with net outflows of £152m, and has now seen outflows in each of the past 12 months.

There was a total of £2.1bn of net retail sales in April, the highest level since the £3.2bn in April 2011.

Fixed income took £599m while the mixed asset sector saw sales of £487m. Equities had an inflow of £437m. UK equity saw inflows for the first time in six months, with £162m in net retail sales.

Funds under management totalled £607.3bn compared with £605.2bn in April 2011.

IMA director of markets Jane Lowe says: “All the main asset classes saw healthy inflows. Fixed-income funds overall remained the top-selling asset for the eighth consecutive month but all the mixed asset sectors also saw positive inflows.

“In equities, there was a mixed picture, notably with inflows to global, Far East and UK sectors outweighing outflows from sectors with European equity exposure.”

Chelsea Financial Services managing director Darius McDermott says: “There is some value in corporate bonds but you can understand people being wary of some of the bigger funds in that market. Strategic bonds have a wide remit in terms of what they can invest in so there is scope for that sector to continue doing well.”


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