Fund sales drop to lowest level since financial meltdown

Figures from the Investment Management Association (IMA) have revealed net retail sales of funds in July plummeted to levels not seen since the collapse of Lehman Brothers.

Net retail sales in the month only reached £936 million, below the monthly average of £2.3 billion for the previous 12 months, while marking the lowest level since October 2008 when there were net outflows.

Equity funds saw net outflows, of £114 million, for the first time since February 2009, after having registered average monthly inflows of £676 million over the last 12 months.

The outflows, which came in the month before the sharp global equity market sell-off, were largely from the UK, Europe and North America. The extent of net outflows from funds covering these regions outweighed net inflows into Global, Japanese and Asia Pacific funds in July.

Richard Saunders (pictured), IMA chief executive, said: ‘While sales of bond funds and balanced funds held up moderately well, equity funds experienced outflows, particularly from UK, European and North American sectors.’

While sterling strategic bond funds have seen strong inflows in previous months, the sterling corporate bond sector was also strong in July.

The Cautious Managed sector was the best selling IMA sector, with net retail sales of £216 million in the month. This was followed by Sterling Strategic Bond, Balanced Managed, then Asia Pacific Excluding Japan.