Net retail sales of UK funds fell £400m in the year to May, down to £1.5bn from £1.9bn, according to the latest Investment Association figures.
Fixed income funds fell from being the best-selling asset class in April 2015 to becoming the worst-selling in May, with their first outflow since January 2014 at £162m.
Equity retail funds were the best-selling in May with net sales of £802m, the highest figure since December 2014. This is in contrast with the previous month’s figures which showed outflows of £92m from equity funds.
UK equity funds, in particular, helped the big turnaround, recording inflows of £284m compared to £2m average outflows seen one year ago, while in March UK equity funds saw the largest ever net retail outflow of £963m.
As for the best-selling sector, UK Equity Income topped the IA ranking with net retail sales of £419m followed by the Targeted Absolute Return sector at £317m.
Investment Association chief executive Daniel Godfrey says investors are more positive on UK equities now that the uncertainty around the election is over.
He says: “UK equity income funds continue to be the driver of inflows, highlighting an ongoing preoccupation with yield among investors in a low interest rate environment.”
Last year was a record-breaking one in terms of sales, with assets under management breaking through £800bn. The total now stands at £899bn up from £807bn one year ago.