Retail investors flee to absolute return and cash
Retail investors were gripped by caution in April as they piled into absolute return and cash funds, according to the latest fund sales figures from the Investment Association (IA).
Data from the trade association showed that while net retail sales hit £1.6bn during the month, ahead of March’s total £1.1bn, they were still 47 per cent lower than April 2014’s tally of £3bn.
However ISA sales reached £1.4bn, marking an increase of more than £200m from the same time last year, as investors took advantage of the new tax free allowance.
Investor concerns over equities were reflected in the IA’s league tables, with Targeted Absolute Return funds topping the sales list, enjoying their highest ever net retail sales with £529m.
But the caution was highlighted most by the appearance of the Short Term Money Market sector within the top five list for funds sales – the first time any cash sector had appeared in the top five since the depths of the financial crisis.
In addition fixed income funds bounced back, after amassing net sales of £329m, the asset class’s best since October 2012, while Equity funds overall suffered a net outflow of £91m in April, marking their lowest sales since August 2012.
For those who wanted to stay in shares, European portfolios were the equity funds of choice, with the Europe ex-UK sector seeing net sales of £397m and European Smaller Companies vehicles notching up £179m
Meanwhile, retail investors continued to abandon UK equity funds, which endured net redemptions of £837m in April, their second largest ever outflow. Within that total, UK All Companies was the worst-selling IA sector for April 2015, with an outflow of £829m.
