Investors turn to bonds in July as UK equities suffer outflows
Latest figures from IA
UK retail investors poured £1.8bn into bond funds in July, making them the best-selling asset class, while redemptions from UK equities led to overall negative flows for equity funds.
According to the latest Investment Association (IA) figures, Global Bonds and £ Corporate Bond were the two best-selling sectors during the month, taking in £693m and £691m respectively.
On the other hand, equities as an asset class suffered £609m of net outflows overall, driven by £912m of redemptions from UK equity funds.
In fact, the only other equity region that saw modest outflows was Japan, while all other regions were in the black. Asian equities were the most in demand, with £253m of retail inflows in July.
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Apart from fixed income, mixed asset funds and funds classified as Other, such as those in the Targeted Absolute Return, Volatility Managed and Unclassified sectors, continued to see retail inflows.
All other asset classes, however, suffered redemptions. The worst-selling IA sector was Specialist with £476m in outflows.
However, responsible investment remained in favour, taking in £966m in net retail money in July. Tracker funds were also vogue with inflows of £1.4bn.
Total sales of retail funds for July stood at £1.6bn, more than double the figure for the same month last year, while institutional sales soared even higher to £5.7bn, the IA reported.
Chris Cummings, chief executive of the IA, said: "The fund market maintained a steady course in July as savers invested £1.6bn. Bond funds took pole position, with net retail sales close to £2bn for the third consecutive month, as investors sought out new sources of income.
"Responsible investment funds have sustained their strong appeal during the coronavirus pandemic, with savers investing almost £1bn for the third time since April."
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