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Investors seeking the safer option of income funds

Cofunds is reporting a major shift towards sales of income funds over growth funds in the first half of this year compared with the same period in 2001.

This year, six equity-income and fixed-income funds made it into the top 10 best-selling funds compared with only two in the first half of 2001. The two most popular funds were the Credit Suisse and Liontrust First income funds.

There were no technology and global growth funds in the top 20 and the number of European funds halved to two. UK funds have proved popular, with the number in the top 20 increasing by a third to 16. The other two are a US smaller companies and a specialist fund.

Diversity of sectors represented in the top 10 has decreased since 2001 as technology, telecommunications and specialist funds dropped out of the list.

Cofunds chief executive Clive Boothman says: “There is a marked difference in investment trends between 2001 and 2002. The comparison of sales data suggests that investors are taking a safety-first approach with a predominance of income and fixed-interest funds over growth funds. Against a backdrop of volatile markets the number of income-seeking funds in the top 20 best sellers has more than doubled against last year.”

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