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IMA: Bond funds suffer record redemptions in June

Robert Sinclair

Fixed income funds suffered £624m in net redemptions during June, according to the latest figures from the Investment Management Association.

The three worst-selling IMA sectors for the month were £ Corporate Bond, Global Bonds and £ Strategic Bond.

IMA director of public policy Jonathan Lipkin believes fixed income has suffered due to uncertain central bank policy.

He says: “The highest-ever net redemptions of fixed income funds may have been a response to anxieties about future tapering by the Federal Reserve and other central banks.” 

The bestselling sector was IMA Mixed Investment 20-60% Shares with a net £271m in retail sales, followed by UK Equity Income and Targeted Absolute Return.

Equity remained the best-selling asset class, with £884m of net retail sales in June. In contrast to recent trends, investors showed a preference for UK equity funds in June, which saw the highest net retail sales since October 2006 at £479m.

Bestinvest managing director for business development and communications Jason Hollands says: “We have been warning for months over the growing risks in fixed income and the absence of fundamental value across the market.

“We favour strategic bond funds for fixed income exposure, though the focus of these will be overall return rather than income yields.”

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