UK investors put £2.8bn into funds in April – a £1bn increase on March and the highest level since August 2021, according to Investment Association figures.
But bond and money market fund flows outpaced equities with £1.1bn each compared to just £93m for equities.
Tracker funds experienced another strong month, with inflows of £1.6bn.
Chris Cummings, chief executive of the Investment Association, said: “This month, we have seen investors opt for a cautious approach favouring bond funds, which saw £1.1bn inflows, and choosing globally diversified equity funds. UK gilts also benefited, with £259m invested in April.”
He said demand for ISAs rose in April, with £342m invested within the tax-free wrapper, five times more than the previous month.
It was however less than the same time last year, with £646m invested in April 2022.
Emma Wall, head of investment analysis and research, Hargreaves Lansdown, said: “The asset management industry can breathe a sigh of relief – investors are buying funds again, after a dreadful 2022 which saw record outflows across all sectors.
“Clearly, while confidence in investing has returned, confidence in equity markets remained off in April. Concerns about inflation are in part to blame, as were less-than-rosy economic forecasts. Persistent warnings of a downturn in the developed world spooked many investors into lower risk assets. But since April, there have been some green shoots.”
BEST SELLING INVESTMENT ASSOCIATION SECTORS
The five best-selling Investment Association sectors for April 2023 were:
- Short Term Money Market with net retail sales of £770m.
- Global with net retail sales of £340m.
- UK Gilts followed with net retail sales of £259m.
- Specialist Bond with net retail sales of £226m.
- Mixed Investment 40-85% Shares was fifth with net retail sales of £225m.
The worst-selling Investment Association sector in April 2023 was UK All Companies, which experienced outflows of £1.1bn.
NET RETAIL SALES BY ASSET CLASS
Fixed Income funds saw inflows of £1.1bn.
Money Market saw inflows of £1.1 billion.
Mixed Asset funds saw inflows of £346m.
Other funds (which includes the Targeted Absolute Return, Volatility Managed, and Unclassified sectors) saw £177m in inflows.
Equity funds saw inflows of £93m.
Property funds experienced £19m of inflows.
NET RETAIL SALES OF EQUITY FUNDS BY REGION
Global funds saw net retail inflows of £452m.
North America funds saw inflows of £100m.
Japan funds experienced inflows of £45m.
Asia funds saw net retail outflows of £54m.
Europe funds saw outflows of £158m.
UK funds saw outflows of £1.3bn.
TRACKER FUNDS
Tracker funds saw net retail inflows of £1.6bn in April 2023. Tracker funds under management stood at £294bn at the end of April. Their overall share of industry funds under management was 21.0%.
RESPONSIBLE INVESTMENT FUNDS
Responsible investment funds saw a net retail inflow of £216m in April 2023. Responsible investment funds under management stood at £96bn at the end of April. Their overall share of industry funds under management was 6.8%.
GROSS RETAIL SALES BY DISTRIBUTION CHANNEL
Gross retail sales for UK fund platforms totalled £13bn, representing a market share of 46.0%.
Gross retail sales through other UK Intermediaries including IFAs totalled £ 9.8bn, representing a market share of 34.3%.
Gross retail sales for Discretionary Manager totalled £1.8bn, representing a market share of 6.2%.
Direct gross retail sales totalled £1.2bn, representing a market share of 4.2%.
In April, Execution only intermediaries totalled £105m in gross retail sales and accounted for 0.4% of the market.
