Net retail fund sales fall to lowest level since Lehman crisis

Net retail fund sales for July fell to their lowest level since October 2008 while equity funds saw net outflows for the first time in over two years.

IMA figures reveal net retail sales of just £936m for July, down from £2.4bn in July 2010 and well below the monthly average of £2.3bn seen over the past 12 months.

The figure is the worst seen since funds saw net outflows in the post-Lehman Brothers panic of October 2008.

Equity funds saw net outflows for the first time since February 2009, with investors pulling out £114m, contrasting with an average net monthly inflow of £676m over the past year.

Net inflows into Global, Japanese and Asia-Pacific funds were outweighed by redemptions from UK, European and North American funds.

The leading sector was Cautious Managed, with net retail sales of £216m, followed by £ Strategic Bond with £156m in net sales and £146m worth of sales for the Balanced Managed sector.

July 2011 net ISA outflows of £29m also compared unfavourably with inflows of £265m in July last year.

"At this stage it is too soon to speculate on whether these figures, which predate August's market volatility, presage a shift in investor behaviour or are simply a one-off," said IMA chief executive Richard Saunders.