Investors making increasingly cautious choices

According to the Investment Management Association’s (IMA) investment fund statistics for August, the Absolute Return sector was again the most popular UK domiciled net retail sector, with inflows of £150.3m. In July net retail inflows were even higher, accounting for £232m.

As testament to investor caution again, the most popular UK domiciled net ISA sector in August was Guaranteed Protected funds. In July it was Cautious Managed.

Although caution is increasingly evident in investors’ choice of funds, the proportion of money coming out of retail funds compared with that going in, fell in August.

Net retail sales were up by £90m, whereas in July net retail sales were down by £495.1m.

Net sales of UK domiciled investment funds within ISAs also saw reduced outflows. They accounted for £281.9m compared with outflows of £412m the previous month. Outflows in August 2007 were £162m.

Funds under management of UK domiciled investment funds were up in August. They accounted for £426.5 billion, an increase of 3% on July, but 7% down on August 2007’s figure of £457.2 billion. British domiciled ISA funds under management of £86.8 billion were also up 3% on the previous month, but were 4% lower than the same month the previous year.

Overseas funds under management of £18.5 billion in August were a slight increase on the previous month’s figure of £18.2 billion, while overseas ISA assets of £317m saw an increase of 5% from the previous month.