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Sales of UK equity income funds hit all-time high

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Private investors ploughed a record amount into UK equity income funds in April, according to latest sales figures from the Investment Management Association (IMA).

The UK Equity Income sector drew in £500m, the highest amount since records began in 1992 and the first time the sector has topped the best-selling list since September 2013.

Global equity funds were the second best-selling region with net retail sales of £375m, while European equity funds rounded out the top three with sales of £285m.

Overall, equity funds continued their positive run, outselling all other asset classes for the twelfth consecutive month with net retail sales of £1.4bn in April.

Mixed Asset funds were the second best-seller drawing in £511m, while Property was the third best-selling asset class, with net retail sales of £446m – levels not seen for nearly five years.

In total, private individuals invested £2.9bn into open-ended funds in April, the largest amount in three years.

Daniel Godfrey, IMA chief executive, said: “Fund sales were just shy of the £3bn mark in April with £1.3bn coming from investors making the most of their tax-free ISA allowances by rushing to meet the end of tax year deadline or topping up at the start of the new one.

“The IMA UK Equity Income Sector was the best-selling sector for both ISAs and funds overall. However investors also channelled money into mixed asset and property funds – property in particular has been seeing consistent growth in sales over the last year.”

Inflows into the UK Equity Income sector are expected to remain strong with the launch of the hotly anticipated Woodford Equity Income fund next week.

Jason Hollands, managing director of adviser firm, Bestinvest, said: “While the Woodford launch is hogging the limelight other strong contenders in the sector include Artemis Income, Fidelity MoneyBuilder Dividend, Standard Life UK Equity Income Unconstrained, Threadneedle UK Equity Income and Unicorn UK Income. Ardevora UK Income is a little known challenger that should start to appear on radars now it has notched up a three-year record.”

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