Absolute return funds rake in £343m in January

Funds in the IMA Targeted Absolute Return sector brought in £343m of net new retail money in January, the sector’s best sales figure in more than five years.

Data from the Investment Management Association (IMA) shows the sector as the top-selling fund group during January, bringing in more than £100m more than the second best selling sector, IMA UK Smaller Companies.

Sentiment has been improving towards absolute return funds as performance within the sector has improved, although in terms of assets the sector is still dominated by the £19.8bn Standard Life Global Absolute Return Strategies fund and the £8.6bn Newton Real Return fund.

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Last year the IMA added the word ‘targeted’ to the sector’s name and introduced a monthly performance monitoring system in an attempt to improve transparency in the sector.

Meanwhile the IMA figures also demonstrated retail investors’ continued appetite for domestic funds, with the three UK equity sectors bringing in a total of £644.2m.

In contrast, the IMA Sterling Corporate Bond sector saw outflows of £225.5m, the biggest withdrawal during January. The IMA Asia Pacific ex Japan, IMA Global Emerging Markets and IMA Global Emerging Markets Bond sectors all saw significant outflows as sentiment and performance fell dramatically.