EquitiesMay 29 2013

Equity income sales hit highest level since 2007

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ByMathew Jeynes

Sales of UK-domiciled funds hit £2.1bn in April as investors flocked to equity funds during the market rally.

The latest figures from the Investment Management Association found that equity funds returned to being the best-selling sector last month, with £799m, after slipping into second in March.

In spite of the country’s sharp rally, equity funds investing in Japan were the only funds to see net outflows during April, as global equity funds once again dominated with £432m.

The IMA UK Equity Income sector shot to the top of the sector rankings, having been in 15th place last month, as the £358m that it brought in made it the best month for sales in the sector since April 2007.

The main drivers of inflows into the sector were James Lowen and Clive Beagles’ £1.8bn Johcm UK Equity Income fund, Adrian Frost and Adrian Gosden’s £5.5bn Artemis Income fund and the £1.2bn Trojan Income fund run by Francis Brooke, which soft-closed at the end of March, while Neil Woodford’s Invesco Perpetual funds actually saw outflows during April, according to data from FE Analytics.

Mixed asset funds saw their highest net sales since April 2011, bringing in £610m, while fixed income funds brought in £335m in net new money.

Jason Hollands, managing director of business development & communications at Bestinvest, said the figures showed a return to normality after investors focused on lower-risk assets going into the tax-year end in March.

Mr Hollands said the popularity of equity income funds last month “reflects the fact that income seekers are being driven further up the risk spectrum due to the distortions caused by quantitative easing”.