Investor sentiment has plummeted to its lowest level this year, with net
retail sales of investment funds down by 58.8 per cent to £504.8m in
July from £1,234.4m last year.
Net sales of investment fund Isas were not hit as hard but were still
down by 32 per cent to £437.9m from £643.2m, according to Autif.
Total industry funds under management fell by 8.1 per cent to
£245.8bn from £267.5bn.
IFAs once again took the lion's share of distribution, with 67.1 per cent
of gross retail sales compared with 14.6 per cent through tied channels and
12.3 per cent through the direct market.
The UK all companies sector continued to be most popular, accounting for
30 per cent of all unit trust and Oeic sales, despite only making up 15 per
cent of the fund universe. UK bond funds also sold well although global
bonds were the least popular along with Japanese funds.
Autif PR manager Clare Arber says: “Sales of investment funds tend to slow
down over the summer months but this year is quieter than usual. It seems
that private investors are increasingly unwilling to commit their cash to
the stockmarket while the short-term outlook for share-based investments
Bates Investment head of research James Dalby says he is not convinced
there is no more downside but believes investors should not sit around
waiting for the bottom of the market. He says: “If I had cash on the
sidelines, I would be buying now. I would probably phase it in over three
or four months. But I do not know if we have hit the bottom yet.”