Tracker funds rocket to record Q1: IMA

Tracker funds reported their highest ever net retail sales in Q1, although inflows into ethical products were below recent levels, according to IMA figures.

Net retail sales for the first three months of the year soared by £694m to £824m, compared to just £130m for Q1 2010. 

Trackers now represent 6.8% of total funds under management; the highest proportion on record. FUM for trackers totaled £39.8bn, up 19% on the same period last year.

Meanwhile, ethical funds' net retail inflows dropped to £90m, below the average of £97m for the past four quarters. Ethical funds under management reached £7bn at the end of Q1 2011, up 15% on Q1 2010.

Fund of funds continued to grow in popularity, with gross retail sales accounting for £1 in every £8 invested in all funds. Net retail sales for fund of funds totalled £1.74bn, up £597m from the same period last year.

Richard Saunders, chief executive at the IMA, commented: "Quarter 1's statistics show a growing appetite for tracker funds, with the highest net retail sales of trackers on record. Although tracker funds account for a modest 7% of total funds, this proportion has been growing steadily over the past two years.

"Funds of funds remain popular with investors. In gross retail sales terms, £1 in every £8 invested in funds was invested in funds of funds in Quarter 1.

"Net retail sales of ethical funds totalled £90m in Quarter 1, somewhat below the average of £97m for the past four quarters. Ethical funds continue to represent just under 1% of total sales."