Bond funds return to top of Skandia sales league


Funds with an income focus made the biggest contribution to the Skandia top 10 selling fund list for the month of May, with bonds seeing a return in popularity.

The Towers Watson UK fixed interest sector made a return to the top spot with 24.8 per cent of net sales over the platform last month, bouncing back from a low point earlier this year.

Skandia attributes the rise in the fixed interest sector to particularly strong sales of two sterling strategic bond funds, the £1.5bn Fidelity Strategic Bond and £41m Old Mutual Monthly Income funds.

The Fidelity Strategic Bond fund was the top selling fund on the Skandia platform during May, with the Old Mutual Monthly Income fund appearing further down the list in eighth place.

The multi-asset sector follows closely behind in second place, with 23 per cent of net sales. Elsewhere, the global specialist and UK equity sectors also continue to be key investment sectors, with figures remaining “fairly constant”, according to Skandia.

Skandia describes the £861m HSBC American Index fund reaching the third spot as “notable”, given the recent performance of US equities. However it also points out that it is unusual for a passive fund to feature in the top selling list.

May also marked the first time a property fund has featured in the top 10 this year, following the inclusion of £936m Henderson UK Property Trust. Skandia says this could indicate investor’s willingess to move into other assets as part of the hunt for income.

Skandia director of investments James Millard says: “In the current low bond yield environment it is becoming increasingly more complex allocating to fixed income. Strategic bond funds have benefited from this, with investors preferring to use skilled managers who have the flexibility to allocate across the fixed income universe.

”The emergence of property amongst the top selling funds alongside many other income oriented funds also reflects the continued search for sources of income and diversification away from traditional fixed income strategies.”