Equity funds outsell fixed income – IMA

Daniel Godfrey, chief executive of the IMA, said: “Net retail sales were strong again in November with equity funds the strongest sellers for the third month in a row. This is partly due to investors preferring equity income over fixed income for income generation.”

According to the IMA statistics, the fixed income asset class saw a £667m drop in net retail sales in November 2012 to £43m. This was the lowest inflow since October 2008 when there was an outflow of £142m.

In comparison, UK Equity Income had net retail sales of £221m – the highest since May 2007 and well above its monthly average of £47mn over the previous 12 months. The last time this sector was listed as the best-selling was in September 2008 with net retail sales of £190m.

Global bonds recorded net retail sales of £14.4m.

Equity was the leading asset class in November 2012, for the third consecutive month, with net retail sales of £720m, the highest since April 2011 when sales were £1.25bn.

Fund platforms took £133m worth of UK equity income sales, £21m of which was in Isas. Global equity income saw £48m of sales on platforms, of which £13m was in Isas.

In comparison, total fixed income sales on platforms for November was £285m, with £51m in Isas.

Adviser view

Jason Chapman, managing director at Willis Owen, said: “Many investors were looking to cash as a haven in the face of economic uncertainty, but these statistics suggest that may be slowing as we see an inflow back into Isas again.

“In the long-term, an Isa presents more chances to generate income than keeping cash under the proverbial mattress, or in a low interest savings account.”