Retail fund sales bounce back in March

Retail fund sales bounce back in March

Retail fund sales returned to the black in March after two consecutive months of net outflows, though signs of caution were again evident via the popularity of absolute return funds.

Investment Association (IA) figures showed total retail net inflows hit £379m in March as the tax year drew to a close, alleviating some of the pressure following £835m net outflows in the first two months of 2016.

The Targeted Absolute Return sector proved most popular among retail investors for the second consecutive month with net sales of £485m. UK Equity Income was the second most popular with net inflows of £242m.

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However, March proved to be a tough month for equity funds overall with total net outflows of £459m. Funds in the UK All Companies sector saw £682m leave.

Fixed income funds were more popular. Despite seeing net outflows of over £500m in January and February, the asset class saw sales of £235m in March.

This was led by £112m of net inflows in the Sterling Corporate Bond sector and, in potential sign of increased risk appetite, the first positive month for Global Emerging Market Bond funds since July 2015.

Some £190m of net inflows also went into the mixed asset sectors.

Tracker funds also returned to positive territory after a slump in February, with passive funds attracting £393m of net inflows.

IA interim chief executive Guy Sears said the popularity of multi-asset and absolute return ahead of equity funds was a “sign of the times”.

He said: “With changing pension regulation and uncertainty in the global economic outlook multi-asset and absolute return products have been popular with retail investors. These sectors have grown in recent years as our members have reviewed existing products and introduced new funds to meet investors’ changing needs.”