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IMA reveals fund of fund rise in fourth quarter

Funds under management in the fund of funds sector rose to £34.3bn in the fourth quarter of 2007 marking an 18 per cent increase from the same period in 2006.

Net retail sales in fund of funds also rose in the final quarter to £343.2m, a marginal increase on the £330.1m in the previous quarter. However fourth quarter fiqures were 44 per cent down from the same point in 2006.

For the whole of 2007 total net retail sales for fund of funds stood at £1.6bn, down from £3bn in 2006.

Ethical funds under management continue to see a slight increase from the previous quarter reaching £5.9bn, with net inflows in retail sales reaching £99.7m. Total net retail sales for ethical funds in 2007 reached a record £473m, a massive increase from the £136m seen in 2006,

Meanwhile, tracker funds under management remained stationary between the end of the third and fourth quarter at £27.1bn. They rose by 6 per cent from the £25.6bn in the fourth quarter of 2006.

However, outflows in retail sales doubled from the £30m at the end of the third quarter to £59.6m at the end of the fourth. Net retail sales for tracker funds for the whole of 2007 saw outflows of £110m, a fall from the £239m in 2006.

IMA chief executive Richard Saunders says: “The published performance figures continue to show the benefits of investing for the long term, with the average investment in a UK All Companies fund returning 80% over the last ten years, despite the downturn in the markets at the turn of the century, and despite recent volatility.

2007 saw net inflows of nearly £3½ billion into funds of funds including net retail sales of £1.6 billion. Although retail sales were down on the previous two years they continue to remain popular with retail investors.”

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