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Investors diversify and keep Fof sales strong

Funds of funds represented nearly half of total net retail fund sales in the second quarter of this year.

Fofs saw net business of £1.1bn in the three months to June, slightly up from the same quarter last year when the figure was £1bn but a big rise from the first quarter of this year’s figure of £693m.

Total net retail fund business stood at £2.3bn for the second quarter, down from £3.6bn in the second quarter of 2007 but a massive improvement on this year’s first-quarter total of just £190.5m.

Tracker funds saw a net outflow of £700,000 in the second quarter compared with an inflow of £64.3m in Q1 and an outflow of £15.3m in Q2 2007.

Ethical funds had a net inflow of £49.5m in Q2 compared with £27.6m in Q1 and £137.7m in Q2 2007.

Chief executive Richard Saunders says: “Funds of fund sales have proved resilient over the last nine months while retail sales in other sectors have slowed down markedly.

“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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