Fixed income funds were more popular overall, with net retail sales of £5.6bn, but equity funds outsold fixed income in each of the last four months of 2012.

Total equity sales amounted to £3.4bn for the year and still hold the highest proportion of total assets under management (AUM).

However, despite the rotation to equities towards the end of 2012, the proportion of funds under management in equities is still in steady decline, going from 72% in 2003 to 53% in 2012. In contrast, fixed income AUM has increased from 15% to 18% over the decade.

The £ Strategic Bond sector was the best-selling sector of 2012, with inflows of £2.2bn, while funds in the UK All Companies peer group saw the highest outflow, at £2bn.

The second most popular sector was £ Corporate Bond, with net retail sales of £1.9bn, followed by Mixed Investment 20-60% Shares, previously known as Cautious Managed, which saw inflows of £1.8bn.

Global Emerging Markets, the fourth best-selling sector, saw its highest ever recorded sales of £1.6bn, while the Global Equity Income sector, only a year on since it was formed, was the fifth most popular with sales of £1.4bn.

From an equity perspective, global funds were the most popular with inflows of £4.1bn, followed closely by Asia, whereas European and UK equity funds were the least popular.

UK equity funds saw outflows of £982m, more than reversing the inflows of £714m in 2011, while European equity funds saw investors withdrawing £527m through the year, the 11th successive year of outflows.