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IMA Q2 stats reveal 2% increase in fund of funds

Fund of funds remain resilient but sales show increasing diversification amongst investors, according to the IMA’s quarterly statistics.

Funds under management in fund of funds at the end of Q2 2008 reached £33.3bn, up 2 per cent from £32.7bn in the previous quarter. Balanced funds continued to account for the majority of funds under management, representing 67 per cent of assets, followed by 19 per cent in equity funds.

Net sales of fund of funds totalled at £1.1bn for the second quarter, up 67 per cent from £639m on the previous quarter. The most popular sector was specialist accounting for net inflows of £447m closely followed by cautious managed with £417m net sales.

Tracker funds under management for the second quarter fell 13 per cent to £23.8bn from £27.4bn in Q2 2007. Retail sales saw a net outflow of £0.7m in Q2 2008 compared with an inflow of £64.3m in in Q1 and an outflow of £15.3m in Q2 2007. The most popular distribution channel for gross retail tracker sales was intermediaries, accounting for 64 per cent of sales.

Ethical funds under management were £5.2bn for the quarter down from £5.7bn for the same period last year. Retail sales saw a net inflow of £49.5m, compared to £137.7m in Q2 2007.

IMA chief executive Richard Saunders says: “Funds of funds sales have proved resilient over the last nine months, while retail sales in other sectors have slowed down markedly. Sales continued to be buoyant in the second quarter. This almost certainly reflects a wish by investors and their advisers to take advantage of the diversification they can offer in turbulent markets, but also reflects a longer underlying trend to invest in this product type.”


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