UK Gilts became the best-selling asset class in October, the first time it has taken a leading share of the Investment Management Association’s (IMA) net retail sales.
Monthly statistics from the IMA showed retail investments into the UK Gilts sector soared last month with net inflows amounting to GBP154.8m. This sector has never been the best-selling sector before, demonstrating British investors’ concerns about equity markets as we enter a recession.
The last time a fixed interest sector was the most popular was in April when the UK Other Bond sector topped the list. Since then the recently-created Absolute Return sector dominated sales for three months and UK Equity Income briefly took the top spot in September.
Meanwhile, in a reversion of trends, the Specialist sector became the worst selling peer group. For most of 2007 and 2006 it was the top-selling sector largely owing to the popularity of property funds. However, in October it had the largest net outflow of GBP 256.1m. The IMA said £117.2m was from property funds. It last topped the sales in May this year when many investors were favouring commodities.
In terms of gross retail sales, the UK All Companies group was the most popular sector taking an 18% share of sales in British domiciled funds.
Overall, sales figures were down. October saw net retail sales fall by £500.4m bringing funds under management to £338.9 billion. This compares with GBP 481.2 billion a year ago and was 11% down on the previous month. Similarly overseas funds under management dropped 9% on the previous month to £15.3 billion.
Richard Saunders, chief executive of the IMA (pictured) says: “October’s outflow meant that in three of the last four months retail investors have been net sellers of funds. But the October outflow remains relatively modest compared to funds under management at around a quarter of 1%. For the first 10 months of 2008, retail investors have added some £1.3 billion to their holdings. There are no signs of large-scale selling by retail investors.”