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Fund sales hit two-year high in July but volatility awaits

Joanna Faith
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Joanna Faith

Fund sales soared last month to reach their highest levels since April 2011, according to the latest figures from the Investment Management Association.

Investors ploughed £2.2bn into funds in July, up from £1.1bn in June and £966m a year ago.

Equities remained the best-selling asset class for the fourth consecutive month, with net sales into equity funds of £1.4bn in July, the highest since December 2010.

Global equity funds were the best-sellers with net sales of £515m-the highest since November 2012. UK equity funds were the second best-sellers with inflows of £392m.

Investors also put £140m into property funds, the highest level since July 2010.

However, despite the positive sentiment, Bestinvest’s managing director, Jason Hollands, said investors should be prepared for “choppy waters”.

He said: “Markets have entered a period of renewed volatility as investors have focused on what a deceleration in China’s growth story might mean globally and have also been fixated on a potential tapering down of quantitative easing by the US Federal Reserve next month.

“With tensions rising over Syria and the choking off of Libyan oil output, we are in for some choppy waters. As panic spreads, crude oil prices have spiralled upwards, equities have come under pressure and gold has spiked.

“September has an uncanny habit of being a difficult month for markets – harbinger of six major sell-offs since the 1990s – but it is important that investors, particularly for those who piled in recently, keep their nerve in times like this.”