News of the Sterling Strategic Bond sector’s dominance in net retail sales suggests investors are still too nervous about equity funds, says AWD Chase de Vere’s Patrick Connolly.
The sector was the biggest selling during March, with net retail sales of £366m, according to the Investment Management Association (IMA).
Connolly, head of communications at AWD Chase de Vere, says investors are extremely cautious about the direction of equity markets currently.
He says: “Investors are looking at strategic bond funds as a safer option [in current markets]. There is more of a concern for capital preservation than capital growth.”
Connolly says the funds can hold a mix of investments, but investors should be wary of risks taken by managers.
According to Connolly, the trend against equity funds was “concerning”. He adds: “History tends to suggest that the best time to buy equities is when nobody else is buying them.”