Continued appeal of bond funds in UK market evident in latest figures from Lipper FMI
Retail fund sales hit record first-quarter figures in Q1 this year, although net sales were down on the previous three quarters, according to the latest UK Fund Flash data from Lipper FMI.
Net retail sales over the period hit £5.5bn, and institutional funds also saw net inflows.
Bonds overtook equities as the most popular asset class for the first time since the second quarter of last year, attracting £1.5bn of assets compared to the £1bn that flowed into equities.
Bella Caridade-Ferreira, the head of market research, says the ongoing appeal of bond funds was proved by the success of Invesco Perpetual’s recently launched Tactical Bond fund.
The vehicle, which is managed by the group’s co-heads of fixed income Paul Read and Paul Causer, took £150m in its initial offer period.
M&G has also benefitted from the popularity of bonds. Its strong fixed income proposition has seen it top the list of best-selling groups for the last six quarters, although in Q1 this year its net flows had become less intense.
M&G took £2.4bn of assets over the quarter, beating Invesco Perpetual’s £1.9bn of inflows.
BlackRock, Swip, and Jupiter also featured in the top five groups by gross retail sales.
M&G saw net retail sales of £930m, compared to BlackRock’s £657m and Swip’s £610m.
Absolute returns funds also held their own over the quarter, with Caridade-Ferreira suggesting investors are now seeing them as core rather than peripheral holdings.
“BlackRock, which arguably has done most to popularise the concept, was one of the few major groups to see its first-quarter sales exceed last year’s quarterly levels,” she says.
Standard Life’s Global Absolute Return Strategies fund also experienced strong retail sales over the quarter, she adds.
Meanwhile, investors have become more interested in overseas equity income funds, Lipper reports, with Newton Global High Income and Schroder Income Maximiser among the most popular.
