Unclassified sector tops fund of funds inflows

Funds of funds in the Investment Management Association’s (IMA) Unclassified sector have surged in popularity, with launches attracting much of the new money.

According to the IMA’s latest figures the Unclassified sector alone enjoyed £1.5 billion of inflows during the second quarter, 51% of all net retail sales in the fund of funds sector.

Although the IMA does not comment on individual funds, it says new vehicles attracted investors’ interest. (article continues below)

Net retail sales for funds of funds totalled £2.3 billion between April and June. These quarterly inflows were £1.3 billion higher than in the same period last year, which means that net retail sales almost doubled.

Cautious Managed funds were the second most popular offering and accounted for 18% of net retail sales in the fund of funds sector.

Assets under management (AUM) in funds of funds remained at the record level of £46.3 billion and account for 9% of overall industry assets

Net retail sales for all funds were £5.2 billion, down from £7.5 billion in the same quarter last year.

Retail sales of tracker funds fell to £202m over the second quarter, £78m less than in the same quarter of 2009. AUM rose by 26% to £27.1 billion.

Ethical funds had £98m of inflows, £106m more than in the second quarter last year, when the sector saw outflows of £8m. AUM rose 22% to £5.6 billion.

Tracker and ethical funds had net retail sales well above the average of recent quarters with the latter’s fund sales the highest for a year and a half.