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Bond fund exodus contines apace

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Bond funds occupied five out of the seven bottom net selling sectors in September according to new sales figures from the Investment Association.

While the Protected sector witnessed the heaviest net outflows of the month, totalling £285.3m, combined outflows of the £ Corporate Bond, £ Strategic Bond, £ High Yield, Global Emerging Markets Bond and Global Bond sectors hit £645.2m. Of these outflows, the Corporate Bond sector was the worst hit, with redemptions totalling £237m.

The only fixed income sectors that witnessed positive inflows were UK Index Linked Gilts, which attracted £50.2m of net retail sales, and UK Gilts, took in £50.7m. This meant that in total fixed income saw a net outflow of £515m in September, the highest outflow for this asset class since June 2013.

In their place, investors are being mostly attracted to equity funds, with UK Equity Income again the top seller which net retail sales totalling £445m. Meanwhile, away from the hunt for yields, the Targeted Absolute Return sector proved the second best selling peer group, taking in net retail sales of £323m.

Total net retail sales for the fund surpassed the £1bn mark, hitting £1.1bn, with the Property sector another notable winner attracting £196m of sales.

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