Record year for funds of funds

Net retail sales of funds of funds in 2010 have reached their highest level on record, according to the latest quarterly figures released by the Investment Management Association (IMA).

Following net retail sales of 1.5 billion in the third quarter, sales of funds of funds year-to-date have hit £5.1 billion, a level that surpasses all previous years.

As a result, funds of funds now account for 9.6% of total funds under management (FUM), their highest market share on record. Since the third quarter of 2009, FUM in funds of funds has jumped 31% to £52 billion.

Sales of Active Managed, Balanced Managed, Cautious Managed and UK Equity and Bond Income fund — collectively titled balanced funds — hit £963m during the quarter.

The Unclassified and Cautious Managed sectors were the two top sellers in the third quarter. (article continues below)

Meanwhile, tracker funds recorded their highest year-to-date retail sales since 2002 at £599 million. As a result, FUM in trackers jumped 15% to £30.4 billion compared with last year.

Sales of ethical funds rose 25% compared with the same time period last year, rising to £74m. This led to a 12% rise in FUM to £6.1 billion.