Equities playing catch-up but bonds still ahead - IMA

Bonds continue to dominate UK net retail sales although equity funds are starting to gain ground, according to IMA sales figures for July.

Of the £2.3bn net retail sales in July, £829m went into bond funds while total net equity sales made up £711m.

The top selling sector was Sterling Corporate Bond on £466m with the Strategic Bond sector the second more popular fixed income sector with net inflows of £180m. Meanwhile, High Yield took inflows of £88m and £64m went into Global Bonds.

On the equity side, Asia Pacific Ex Japan was the most popular, and second best seller overall, with £250m inflows. The newly launched Absolute Return sector took inflows of £157m.

Overall, total net sales have dipped slightly on June which saw sales of £2.4bn but are far ahead of July 2008 which saw total outflows of £552.8m.

In addition, funds under management in the UK are rising, reaching £412.6bn in July, up 6% on June's figure of £390bn, but down on July 2008's figure of £415.1bn.

There were still some sectors seeing outflows with Europe Ex UK losing £36.5m over the month and UK Smaller Companies and UK Equity and Bond down £17m and £9m respectively.

"Retail sales continue to be robust, with strong inflows seen since late last year," says Jane Lowe, director of markets at IMA.

"Corporate bonds continue to attract investors; but more recently equity fund sales have also grown and are now almost on par with bond funds."