Fund sales dive to lowest level since 2008

Fund inflows in September were at their lowest level since the credit crunch hit markets in October 2008, while quarterly figures were down two thirds on last year.

The latest IMA stats show net retail sales of £568m last month, compared to £2.4bn in September last year. Sales were also well below the monthly average for July and August of £2.1bn.

Third quarter retail sales were £2.6bn, down around two thirds compared to the £7.5bn of sales for the same quarter last year.

Richard Saunders, chief executive at the IMA said: "September's further slowdown in fund sales confirms the trend of the previous two months. As a result net retail sales in the third quarter were the lowest since 2008."

Equities overall saw outflows of £175m as investors piled into bonds in the wake of volatile markets, although the UK Equity Income sector remained popular.

Bonds saw net retail sales of £333m in September, with £216m going into the £ Corporate Bond sector and £111m into UK Gilts, the highest level of sales this sector has seen since December 2008.

However bond sales for the quarter totalled £803m, down on the £3bn which went into the asset class in Q3 in 2010.

Saunders added: "Investors were cautious in their asset class choices in September, with bonds and balanced funds the best selling assets."

The £ Corporate Bond sector was the best-selling sector overall, with UK Equity Income next, followed by Cautious Managed and Balanced Managed.